When hairdressers Peter and Mark Keaveney opened their first Peter Mark salon on Dublin's Grafton Street in 1961 over Maguire's chemist shop, the rent was £6 a week and it cost £800 to fit it out. The Co Meath brothers lived in an apartment on the top floor, parked their VW Beetle outside all day and walked down to Bewleys for a one-and-four-penny breakfast every morning.
Peter, West End trained and home for a holiday, had persuaded younger brother Mark that the Irish public was ready for a move away from the tight perms and roller sets of the 1950s.
Business took off and they opened a second salon in the basement, commissioning architect David Duignan, who designed a futuristic subterranean theme salon that was unique in Ireland at the time. A third was launched when they leased, and eventually bought, the Palm Grove cafe premises at 74 Grafton Street.
This was a blue chip investment for the brothers and number 74 is still Peter Mark's flagship salon. "Leaseholds were a minimum of 21 years in the 1960s with no rent reviews. The economy was sluggish and returns were modest. You could purchase equity by way of a lease and landlords were eager to sell because of the static rents," says Mark Keaveney.
Architect Sam Stephenson, whose office was across the road in Brown Thomas, designed the Grafton Street salon in the 1960s. This was their biggest to date, with 3,500 sq ft of floor space and incorporating a beauty salon and wig boutique. Many who were around in the 1960s will remember Peter Mark's £5 washable fibre wig as one of the hottest fashion trends of the decade.
The brothers say their decision to have a salon in the first shopping centre in Ireland, which opened in 1966, was "a catalyst" for the company. "People weren't sure if Stillorgan would work," remembers Peter. Some 38 years later, the two brothers have 65 hairdressing salons in shopping centres and on main streets from Cork to Donegal. They say that their hairdressing operation is the largest of its kind in Europe.
The company now employs 1,400 staff, runs state-of-the-art training centres in Dublin and Belfast and has a dedicated recruitment centre. A laundry was built to wash the thousands of pure white towels used in the salons each day.
Outgoings are high, with combined rent, rates and upkeep of the chain costing close to £2 million. Fitting out a Peter Mark salon costs £130 per square foot and wages are 60 to 70 per cent of each salon's turnover. Not bad for a couple of young hairdressers who were turned down for a bank loan to open their first salon. "I was 21 and got upset when the bank manager rebuffed us, saying we shouldn't rush in. We walked up Grafton Street to another bank who said yes and we've been with them since," said Peter Keaveney. The chain's property portfolio is impressive. The brothers own 30 per cent of their premises in a mix of shopping centres and high street locations and would purchase more if developers were agreeable. The shop in Grafton Street is worth upwards of £3 million at today's prices.
Owning the Grafton Street building outright has ensured the company can afford to have a presence in the street, according to Mark Kavanagh, who regrets that indigenous service businesses are being forced elsewhere by high-spending UK multiples.
"We have spread our risks at Peter Mark, but in future the percentage of freeholds will diminish because it's impossible for anyone other than the anchor tenant to purchase in new shopping centres. Then we will be at the mercy of rents."
The current strong retail rents are a major concern for the Keaveneys and this is proving their greatest challenge to date. Establishing new salons in key locations is essential to remain convenient for the customer.
According to Mark Keaveney, Stillorgan and Rathfarnham shopping centres were ahead of their time in locating hairdressers, coffee shops and travel agents upstairs at lower rents. These, he says, are examples that should be copied in modern retail centres.
"Rents are £60-plus a sq ft in the new shopping centres, but cross the road to a retail warehouse and they drop to £20 a sq ft. Developers will have to build special low-rent areas for services, either outside the main premises or on the top floor, if they want these businesses there. If they keep raising rents, we'll all lose our shirts."
Expansion to England or mainland Europe is not on the cards, say the brothers, who have a hands-on approach to managing the company. However, they did look at a location at Manchester but shelved the idea when the British economy weakened. They are determined not to franchise or go public. "The idea doesn't appeal to the hairdresser in us because going public or franchising would dilute our personal commitment. Hairdressing multiples in France or the US tend to operate in large department stores under the name of the store. That's not possible for us, because we are totally focused on our standard of care."
Hairdressers first and foremost, the two Keaveneys leave the financial management of the company to their brother Paul. Another brother, Cathal, also works in the business and a fifth, Ray Keaveney, is director of the National Gallery. All agree that the advice of their schoolteacher father, James, that they should try everything was an important influence. Peter and Mark Keaveney look on themselves as impressarios rather than businessmen and their salons, all shiny chrome and black with Bauhaus-style chairs and well-groomed staff, is their stage. Performance, however, is the bottom line and this has been spectacular. "Art and commerce don't mix. We think like hairdressers - we are two hairdressers. That's the key to our success," says Peter.
