Much has been made in 2009 of how women across the United States cut back on their use of beauty products and salon services. What will they do in 2010? There are some signs that the economy—and the beauty biz—are finally starting to turn around.

However, a new survey announced last Wednesday by global business-advisory firm AlixPartners of 600 Americans about their expected purchasing behavior for consumer products in 2010 isn’t good news for optimists. Those surveyed—all over age 25—say that they plan to be even more frugal next year.

The survey’s specific results? By product categories, the biggest decrease in intended spending was reported in cosmetics (down 8.7% among women) followed by prepared foods/pre-packaged meals (down 7.5% among all respondents) and then health- and personal-care items (down 3.4% among all respondents).

“We’re seeing an evolution” of American consumers from “value shoppers” to “value hunters, tracking down deals and perceived value,” says David Garfield, a managing director at AlixPartners and a leader in his firm’s consumer packaged goods practice.

“In personal care, consumers plan to spend less overall but indicate they’ll remain loyal to brand names,” states Garfield.

Rich Vitaro, a director at AlixPartners, adds, “Although the trend toward frugality is pretty clear, we’re seeing some interesting differences based on gender and geographic region. For example, customers in the South appear less likely to change their buying behavior over the next year than people in other regions.”

The survey results suggest that consumer packaged goods manufacturers and retailers need to exercise discretion in 2010, notes Vitaro. His advice for the year ahead? “At a time when the consumer packaged goods industry is already facing lower sales and tighter margins, companies will need to adopt more strategically targeted marketing strategies and leaner cost structures to succeed.”

See you next Wednesday,
Marc

Merger-and-acquisition activity as it relates to the beauty store arena fascinates me. So as we head toward the end of 2009—which didn’t see a lot of company purchases—I’ve been thinking: What’s the Top Retailer Deal of the Year? The Top Supplier Deal of the Year?

The answer to the first question is easy: Back in January, Premier Salons Beauty announced that it bought the Trade Secret, PureBeauty and BeautyFirst salon stores from Regis Corp. in a blockbuster transaction. Those who attended the one-on-one public interview at Cosmoprof North America 2009 that I conducted with Premier Salons Beauty chairman and chief executive officer Brian Luborsky got an insider’s look at his company’s plans. Get ready for this retailing powerhouse in 2010.

On the supplier side, there were a number of notable acquisitions, but nothing as industry-changing as Premier Salons’ move. My No. 1 pickup is actually a tie between multicultural haircare manufacturers Strength of Nature and Johnson Products.

As we reported online in the fall, Strength of Nature is now the owner of African Pride, taking it over from Colomer USA Multicultural. This comes on the heels of Strength of Nature buying Elasta QP last year.

And, as profiled in our recent November issue, there’s a new Johnson Products—no longer a unit of Procter & Gamble, but led by the dynamic husband-and-wife team of Eric Brown and Renee Cottrell-Brown.

Both of these manufacturers are at the top of my Suppliers to Watch in 2010 list.

See you next Wednesday,
Marc

As many of you know, a beauty store in the Denver area helped aid U.S. national security in the fight against terrorism last September. The details of the incident and the subsequent barrage of news about it made us at Beauty Store Business change our long-standing editorial policy of not publicizing one of the salon industry’s dirtiest little secrets: The fact that large quantities of acetone (found in nail-polish removers) and hydrogen peroxide (found in haircolor bleaches and developers), in the wrong hands, can be used to create homemade explosives.

Unlike any other salon-industry trade publication, we’ve already featured some online news items on the incident and its fallout. (For the record, one newsletter for industry executives covered the incident.) You’ll soon be receiving our January 2010 issue, and in it you’ll find a feature-length Q&A interview with Karan Hoss, the savvy chief executive officer of Torrance, California-based Beauty Supply Warehouse who, with his BSW beauty superstore chain staff, did all the right things to aid national security. Hoss, a true American hero, continues to amaze me too.

We don’t give out Beauty Store Person of the Year Awards (although we’re talking about it in the future). But if we did, Hoss would be my pick for 2009 over runner-up Mike Spinozzi, Sally Beauty Supply president (sorry, Mike, you did everything right in all of 2009), and Brian Luborsky, the chairman and chief executive officer of Premier Salons Beauty, which earlier this year became the new owner of Trade Secret, PureBeauty and BeautyFirst. (Brian, I hope you’ll still allow me to conduct a one-on-one public interview with you at a future Cosmoprof North America—as I did this past July.)

For the first time ever, anywhere, you’ll also find in our January issue tips from the federal government on how you and your beauty store can help fight terrorism, including details and contact information on the recently expanded Bomb Making Materials Awareness Program as well as a fairly new, rapidly implemented regulatory program of high-risk chemical facilities. (Hydrogen peroxide is one of more than 320 “chemicals of interest.”)

In addition to our January issue, we’ll soon post a link on our home page to everything that’s in print.

I’ve been sleeping a lot better lately now that we’ve completed this important project. I can’t thank enough editor/online editor Manyesha Batist, managing editor Shelley Moench-Kelly and associate publisher/advertising director Jerry Lovell for their unwavering guidance and support.

See you next Wednesday,
Marc

Earlier today, the National Retail Federation asked the U.S. House of Representatives to renew federal tax law that shortens the time it takes merchants to write off remodeling costs done at their stores.

“In the current economic climate, some retailers look at remodeling as a way to revitalize a failing store, but the anticipated return has to pay for the costs involved,” wrote Steve Pfister, NRF senior vice president for government relations, in a letter to House members, who are scheduled to vote Wednesday on a bill that will extend nearly 50 tax laws set to expire after Dec. 31, 2009.

A provision in the measure grants a one-year extension to the current 15-year period for depreciation of remodeling work done at retail stores that are owned, any commercial real estate that’s leased and restaurants whether they’re owned or leased. Without congressional action, the period will revert to 39 years.

This provision makes perfect sense to me. Beauty store remodels are important to maintain customer interest and to compete with other beauty retailers. As the NRF notes, the provision helps keep stores open and creates jobs. My guess is that a short email or phone call to your congressman or congresswoman telling him or her what you think wouldn’t hurt.

See you next Wednesday,
Marc

Tachyon Solutions, the company behind the magnificent ecommerce redesign of Sally Beauty Supply, recently received a Silver Award in the 2009 W3 Awards competition of the International Academy of the Visual Arts.

The academy is an invitation-only body consisting of top-tier professionals from media, advertising and marketing firms, and the awards are handed out to outstanding websites, web marketing and web video. Nearly 3,000 entries were received this year.

“Creating the Sally Beauty Supply site was one of our favorite projects this year, and we had a wonderful collaboration with the ecommerce team at Sally Beauty Supply,” says Marion Lewis, Tachyon Solutions chief executive officer. “We are all proud of what we accomplished, and we are gratified to have won this award from such a prestigious international organization.”

Richard BenBassett, Sally Beauty’s senior director of ecommerce, adds, “Tachyon was a creative and responsive partner for the redesign of our site. We are pleased with the results and are gratified that the site was chosen for an award.”

These days SBS—the world’s largest retailer of professional beauty supplies with more than 2,800 brick-and-mortar sites—is doing a heck of a lot of things right. On Nov. 19 in its fiscal 2009 fourth-quarter results, it reported sales up 2% as well as 3.1% same-store sales growth from its fiscal 2008 fourth quarter. Look for SBS to continue expanding its online beauty retailing into 2010 and beyond.

See you next Wednesday,
Marc