Businessman Paul Patikkis bought MySkin about three years ago as a distressed asset and will double the number of clinics across the State by 2022. And despite 2020 being a difficult year with extended lockdowns, four new MySkin locations have opened across Victoria in the past five months on the back of customer demand.
Mr Patikkis says he bought the business recognising that it had good bones and could be repositioned for growth. “This is what I look for. I buy businesses that are underperforming, and I focus on turning them around – it’s what I enjoy doing,” says the serial entrepreneur.
This is the fifth industry that Mr Patikkis has bought, turned around and either sold off or continues to trade today within the Patikkis Group.
“I can usually identify businesses that have strong foundations that just need a bit of TLC,” he says. “Here, the clinics were too clinical, the culture wasn’t right and the staff turnover was too high, so we focused on the experience and our people and brought our training in house. It makes a big difference.”
Mr Patikkis immediately repositioned the business, changing the name from MySkin Laser, and set about building a clientele who were educated about their personal circumstances, rather than aiming for volume.
“I wanted to distinguish myself from other competitors. I wanted to be a skin clinic that does laser, not a laser clinic that does skin – and that reflects our belief that you need to know the skin you are in,” he says. “We are not a volume business that focuses on getting people in and out the door. We believe in developing trust, offering personal service, and building loyalty.
“And because of that, we continue to grow to the point where we are always fully booked. We have gone from performing 7,000 to 12,000 treatments a month and averaging 1400 new clients month-on-month.
“This is phenomenal growth and I believe it is due to the client seeing the family nature of our group so they keep coming back.” With that level of interest, Mr Patikkis says he is looking at the next step for the business, which could include buying up competitors.
But with most players in the multi-billion sector operating under a franchise model, there are relatively few suitable targets. “We don’t run a franchise model, we are the only family-run and owned business of our size in this space in Victoria,” he says. “There were five opportunities in the past few months and I took them all. We are opening our 12th clinic in August. I’d love to acquire more so I need to look to the bigger players.”
Mr Patikkis says acquisition is a sensible strategy given strong interest in the fast-growing market but there remain barriers to entry, particularly in finding good locations.
“There’s no more room in shopping centres. The real estate for this sector is crowded,” he says. “In terms of growth there’s huge potential but this is a market that is both booming and very competitive.”
Pitcher Partners corporate finance executive director James Beaumont, a long-term advisor to the Patikkis Group, says the demand for cosmetic procedures has defied all predictions.
“Interest in accessing cosmetic and aesthetic procedures is now at record highs, with around a billion dollars spent each year by Australians on laser and beauty treatments,” he says. It’s also a market that has something for every age group. “It might be younger customers who want advice and preventative treatment, customers in their 30s who might want laser treatment or to improve their skin, as well as older customers who want to look a little younger and want injectables or wrinkle relaxers.”
“Last year, when people’s holiday expenditure was curtailed and everyone was staring at themselves on camera, we created a Zoom generation who decided it was time to give cosmetic clinics a go.”
Mr Beaumont recently brokered the sale of 56 Australian Skin Clinics to industry dominant SILK, which has 61 clinics across the country, and which has a goal of 150 clinics in the medium term.
The $52 million deal demonstrated the level of interest in the market, including the importance of acquiring territory for expansion.
“There’s significant upside for this sector, but customers are also discerning,” Mr Beaumont says.
“This is a sophisticated customer market who knows what they want, have strong opinions about quality, safety and experience, and they are prepared to pay for it.
“Paul Patikkis and the MySkin Group is well positioned for growth.”
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