Fab Group director Jackie Smith had a career in nursing before she took a new path and founded the firm behind the country’s largest chain of beauty salons.

Starting Caci and, subsequently, parent company Fab
Group, made up of a handful of companies set up to enable Caci, has taken her career full circle.

Smith, who had been running Caci and Fab Group for 26 years up until June 2020, has recently returned to the board as a director after taking 18 months out to focus on skincare development.

New Zealand’s largest private equity firm Direct Capital took a 47 per cent stake in the company in 2020, injecting fresh capital into the business to fund its rapid expansion.

The chain of beauty clinics specialising in skin treatments, injectables and laser hair removal operates a franchise model and has grown its retail presence from 56 clinics nationwide to 78 under the partnership.

It has ambitions to grow its network further to a total of 100 clinics. About 95 per cent of its clinics are owned by women.

Fab Group is made up of Caci – its main business – and supporting organisations; MSL, which handles its direct debits, product supply company Beauty Distributors, which imports and sells its product through the clinics and product brand Skin Smiths.

It has recently built software platform Wandly for the management of its client database and subscription payments, which it plans to monetise and sell to outside operators. It is slowly rolling the technology out to its clinics, with it currently live in 11 locations.

Smith and her husband and Caci co-founder David stepped back following the equity buyout. Nowadays Smith is semi-retired.

She fills her time with family, looking after her grandson, and using the time away from the Fab Group to think about what she would like to do next – namely how she can make a difference within the beauty, wellness and clinical aesthetics space.

“I’m playing around in the nurse space. I’m really interested in the role that nurses have in our communities and how we can enable that,” says Smith.

She wants to carve out a pathway for registered nurses to go out on their own similar to how podiatrists and physiotherapists and other health professionals have. “Within our clinics I think we’ve created a great space for nurses to work, while it is wellbeing, and not in the illness space, I would like to explore more opportunities for that going forward; how we can transition or create opportunities for nurses to practice independently.

“If you think about other healthcare professionals like physiotherapists; they have a model to follow for being in business on their own, nurses don’t have that so much – they are just starting to get that with nurse practioners, but I think there is some work in there that would be interesting to do.”

Caci was founded in 1994 and Fab Group shortly after, it has been through a couple of names changes in that time. Some may remember it as Micromode.

Smith and David fell into starting the business together. The couple had been living overseas in the UK on their OE, pondering what they would do on their return.

David had been doing an MBA while away from New Zealand and Smith in IT, and when they returned they brought with them a piece of technology – a micro-current muscle toning machine called the Caci machine – it was a single machine that started it all.

“With that we were able to do facial toning or what we called a non-surgical facelift.

“We had people knocking on our door saying that’s a great idea, [asking] can we do that too, and so that’s when we had to decide how we went about growing and enabling those people, and we landed on the franchise model,” recalls Smith.

Caci was amongst the first in the world to offer laser hair removal in a clinical setting. Its largest portion of the business, however, is skin treatments; anti-ageing and acne treatments, followed by laser hair removal and injectables such as botox and derma filler – all seemingly ever-growing in popularity, she says.

Smith says the business is on a mission to make “skin confidence accessible” serving a market predominantly made up of women.

So far this year Caci has opened 11 new clinics. When the Covid-19 pandemic hit in early 2020 the business had just 60 locations throughout the country.

“This whole business sector is growing and has a lot of growth in front of it. Both because of population; people ageing and also because people can.

“If I think back to my mother’s generation, there were a lot people that just accepted; if you had acne you had acne, and there was not much you could do about it, or if you had sun damage then you had sun damage and you couldn’t do anything about it, but now you can and so people elect to do something about it,” says Smith.

Caci sits in the middle of the beauty and wellness market – sandwiched between operators that offer grooming and make-up services and facials, and the other end of the spectrum which is plastic surgery, says Smith.

“There are a whole lot of things in that middle space between those two ends and that started really [taking off] in the 90s. It started from the move from neurotoxin like Botox into the aesthetics field out of therapeutics and the advent of lasers for hair removal. That was the beginning of derma fillers as well.

“In the middle [now] you have healthcare practitioners like nurses and doctors and increasingly dentists operating in that middle space of aesthetics.”

Smith says the market has been growing consistently over the past 10 years.

Life before Caci

Smith grew up in Cambridge. She studied for a diploma in nursing at the Auckland Technical Institute (ATI), which later became the Auckland University of Technology.

Smith was a traditional registered nurse before Caci and still maintains her registration even though she is no longer practising, working in an administrative role.

In her twenties she worked in breast cancer research and at the emergency department of now defunct Greenlane Hospital. She then went overseas and never got back into nursing. The 62-year-old hasn’t worked in a clinical setting for 35 years.

The Smiths lived in the UK channel islands in Jersey for six and a half years, where she worked in the computer industry – where she says she got a taste for business. During that time she managed a team of computer engineers for a firm called CSL.

“It wasn’t a planned career change,” says Smith. “It was, ‘Where can I get a job’ and so I applied for the job and managed to convince them that the skills that I had were transferable so they employed me.”

She loved her time in Jersey – and is a frequent visitor to this day.

Smith was 34 years old and David 35 when they established Caci. David had an MBA and a background in the computing industry, and prior to starting Caci he was director of a software company selling into the banking system over there.

Smith had been chief executive of Caci for approximately 18 of the years it has been in business. She has held the title three times over the years, with the longest duration being between 1994 and 2012.

Today the business employs more than 600 staff, about 100 of them nurses.

Smith describes David and herself as two sides of a coin and puts their success down to constantly springboarding ideas off each other. “We kind of just fell into it. You start off doing something and then businesses take off and start taking on a life of their own.

“We like to think we are really smart and make things happen, but I also think you end up responding to the environment and growing it because of what is happening,” Smith says of the opportunity and growth that has been increasing steadily since 2005.

Since Caci was established, the sector and interest for aesthetic treatments has grown significantly, she says.

Caci had the market to itself for over 10 years and competition has ramped up in recent years; in the last five years a number of Australian chains have entered the market.

Technology R&D

The downside to a rapidly evolving industry is wading through the new technologies coming to market. The challenge is testing and filtering through the fads and new tech coming out of Europe, America and Asia, says Smith.

“There’s huge amounts of research internationally going into new injectable products, new light-based treatments; products to address issues with skin and ageing and aesthetics, and the challenge in that is lots of different pathways to get to the same end point. And for a business, it means that you have to be focused and think critically about what that variety adds to your business, and can you actually get a better outcome.”

There is lot of due diligence that goes alongside R&D into new technologies, says Smith.

Caci has its Caci Academy which runs most of the business’s education and research and development programmes. “Quite often we’ll buy a piece of technology and we’ll play around with it in the academy to figure out if it delivers what we need it to deliver. That process can take a couple of years or even longer because it is not just the piece of technology; it is how that is delivered to the customer.

“There will be things like pain and degree of invasive and degree of effectiveness and how do you shape that into the services that make that acceptable for a customer.”

Smith, along with other staff often volunteer for the trials and it has a clinical advisory board and specialist nurses that are involved with the safety parameters.

At any given time there is a machine in the academy under trial and development. “I kind of think of it as a metaphorical shelf and that we have these [technologies] on our shelf getting ready to release into clinics.”

Covid-19 casualty

Caci is a membership model primarily, with clients signing up to one of four different membership plans; for injectables, skin treatments, laser hair removal and body shaping.

“We’ve been working on subscriptions and refining that model for about 14 years – in 2008/9, we released our first membership for laser hair removal and it was about making it accessible for people.”

Smith says Caci’s membership model had been its “saving grace” through the Covid-19 pandemic and the multiple lockdowns that followed.

Caci had a go at expanding its business into the UK under its Skin Smith brand, but it had to abandon those plans shortly after establishing itself there as a result of the pandemic.

It had nine clinics in London, with a tenth ready to open, but Covid killed those plans after the clinics remained closed nine out of 12 months of that first year. “We got to the end of FY2021 and we had to make a decision about trying to hold on to this – it was a loss-making business still, or if we were better to put our resources elsewhere.

“We couldn’t get up there – I’d been going to [London] regularly – and so we decided we needed to cut our losses,” says Smith.

“Like every other business, Covid brought real challenges to us, but I think we were very lucky and in many respects our business model made us really resilient to Covid.”

Smith says sales have bounced back and are now tracking above pre-Covid levels.

“This year is better than last year, and the fact that we’ve been able to get 11 clinics open this year is [proof of that]. The awareness of Caci is increasing.”

Caci is expecting to have 17 new clinics open by the end of September.

Fab Group recently completed building its own booking platform Wandly, which it began developing almost five years ago specifically with its subscription model in mind. This is its second iteration which took two years to develop after it scrapped its first attempt.

When it went to find a customer management system to deploy throughout its business it found it difficult to find one that would suit its model as the options out there were either for the beauty industry tracking customer information or products for gyms.

Smith says the opportunities for Wandly are vast, including establishing it as its own arm and offering the technology to other businesses. It is currently exploring opportunities to transform other industries that are typically costly subscription models.

The platform is being rolled out to Caci Clinics, currently live in 11, and expected to be deployed into all 85 by February next year.

Eye for collaboration

Caci recently put on what it called New Zealand’s first clinical aesthetics symposium, bringing together more than 200 practitioners and industry delegates

Collaboration and getting more players industry to get together is an area Smith wants to spend more time working on. “Until recently I would say the industry has been quite siloed and of a very competitive mindset, and I am very much of the opinion that I think collaboration is a great thing.

“I went to the United States a couple of years ago with NZTE and visited Chobani Yoghurt – such an impressive company, and they have done a lot to build the whole food industry there; supporting new players and it has been really good for them and really good for the industry, and I came back thinking it would be awesome to do that for my industry.

“The Clinical Aesthetics Symposium was the first part of that where we can build something that is good for everybody. I think there is room for lots of different practitioners in the industry,” she says. “What we want is a healthy industry that is growing and that has a place for everybody.”

Smith says the first step to achieve that is to build an ecosystem around the industry where operators can share knowledge and business building skills.

“Collaboration is the way of the future. It is the way good business will be done in the future and there’s a bit of magic that comes when you start talking to people in your industry.”

The beauty of franchising is the that collaboration it enabled, says Smith.

“Our franchisee have this whole extended network that they can share knowledge, so this is just kind of taking it a step further to lift everybody together.”

Smith does not believe the beauty and aesthetics market is saturated – she says business is growing, and it is no where near close to peaking.