“Why”

I keep on getting asked, “Why?” Why did you go into this crazy business of selling beauty products to salons? Is there a lot of money in it? Is it easy? Why go up against the big guys?

I am going to try to clarify the answer.

 Let me start with saying I absolutely love salons, I have always loved going to salons, any salon, even the sometimes rude nail salons.

Salons are my Safe Place.  There is an organization that is literally named Safe Places- NationalSafePlace.org. They post yellow signs on specific places so kids know where to go if they are in trouble or need a little help. This is what salons do for me. I have walked into a salon and started crying at the simple nicety of handing me a cup of tea, or giving me a magazine and telling me to relax. I am one of those people that need to be told to unwind. Spending time in a salon is a guarantee that you will leave better than you came in. Is there any other place in the current commerce that can do the same thing? I say no, well, not without calories.

I believe in independence; it is practically my religion. Not just in the 4^th of July way but, in all aspects of your life. So many people are afraid to exercise their independence. People fear not being loved, not being supported financially or simply being made fun of. I believe that most people working in salons are exercising their independence; independence from their parents, spouse, boyfriend, girlfriend, or even their own children. Stylists work in a salon to express themselves and share their individuality.  I want to support those people. I want to ensure that they have choices, that they can broaden their skills, and most of all, that they can achieve economic freedom.

Salons are the great American refuge for women, not only for their customers but also for the stylist and owners.The salon profession is the first occupation that woman gravitate to when they are suddenly on their own. Whether they are recently out of school, left a bad marriage or just had a baby, salons offer a noble and creative way begin a new career.

Providing salons and stylist with something to sell that complements their talents and differentiates them from others is my “why”.  I look forward to hearing from stylist: “I was able to buy my kid braces because I sold so much of your product!” “I was able to go on a trip with my girlfriends because of your product!”  “I was able to pay for my health insurance because of your products!” 

I want to provide freedoms to this noble group that has always offered me a Safe Place.

Andrea

Consolidation Monsters

There are many things to write about, but I awoke a little angry today. I will use that anger constructively by venting about a very frustrating topic for me. When I start any new venture, big or small, I try to learn everything I can within reason.

When we got the master distributor rights for Screen Professional Hair line in the US, I bought a book called “Chemistry of Hair”, I watched a bunch of training videos, and I re-learned the color wheel. But the part I found most interesting was the evolution of the Professional Hair Care Products and Distribution. Big Surprise:  former American Express Executive thinking of the business landscape!

After hearing a few rumors, I rigorously researched the happenings in the distribution of salon professional products. For quite awhile, in the glory days of distributing, there were small regional distributors across the US and Canada; these were serviced by a family, an intimate situation, where the salon felt welcomed and served. Those types of distributors have mostly vanished; some may still exist, and if you know of one, please let me know. I would love to work with them.

Many of the Mom and Pops grew large enough to be bought, and there has been an aggressive string of acquisitions from two large distributors: BSG and SalonCentric.  Over the last 10 years, their quest for coast-to-coast domination has been a strategic buying spree resulting in two very large and very well funded companies.

These two companies determine what products go into the majority of salons. I would like to think that they select brands for their salons based on quality but no, their primary motivation is revenue and control of the pipeline of products.

Let’s look at the two companies more closely:

BSG- a $3 BILLION dollar a year publicly traded company that also owns more than 3,000 stores under the name Sally’s Beauty or CosmoProf. BSG employs 1,000 sales people across the country, and has had 30 acquisitions in 10 years. *this information gained from their 10-K report issued to the SEC

Salon Centric- Finding information on Salon Centric is difficult because they are owned by the “mega brand” L’Oreal.  Their financials are buried deeply in L’Oreal’s financials, based out of France.  Yes, a manufacturer owns them. But their acquisitions speak for themselves.

Many speculate that the two companies will both continue their acquisitions into the coming years.

Take a closer look at the lists of acquisitions:

BSG

Sally Beauty’s

Armstrong McCall (Texas)

Innovations (CA)

Cosmoprof Store

Schoenmen Beauty (PA)

West Coast Beauty (CA)

United Beauty (CT)

Heil’s (KY)

Macon (GA)

To name a few…

SalonCentric

Beauty Alliance (FL)

Columbia’s (SC)

Maly’s (West)

Marshalls (Chicago)

Mid City (Chicago)

Ace (FL)

CB Sullivan (MA)

Golf Coast Beauty (LA)

State Beauty (MO)

Peel’s (IA)

To name a few…

I bet you can imagine what products are most important to SalonCentric  aka L’Oreal, THEIR’S:  L'Oreal Professional (aka Artec) Keratase, Redken, Matrix, Pureology, Shu Uemura, and Mizani. For other products to get placement with SalonCentric, they would need to discount their products enough to make up for the extra margin SalonCentric is also getting as a manufacturer. Ugly and not conducive to growing the options for today’s stylist, I think it is downright un-American to block competition with dominance. Oh yeah, L’Oreal is not an American Company. The company is so big that it is in my spell check.

As for BSG, their loyalties lie with their shareholders, and because of their vast size, they bully their manufactures into dramatically discounting prices (similarly to Walmart). They make the majority of their money from their stores. Most of their stores have only a manager and 3 part-time employees* with very little knowledge of the industry. They cannot and do not have a long term plan for stylist education.

 Rumors have been spreading for years that Proctor and Gamble is going to buy BSG, I have not been able to substantiate this, but it makes sense.  Proctor and Gamble owns the following professional brands:  Wella, Sebastian, Clariol, Nioxen and will exacerbate the war between P&G and L’Oreal. This could cause price decrease in professional brands as they try to win, the never-ending war.

So in short, these consolidations do not benefit the Stylist or the Salon Owner. They reduce choice, customer service and education. The industry has changed a lot and not in a good way.

This is why Screen Hair Care in the US has created its own distribution model; we have offered micro-distributorships to ambitious industry leaders. They can enter the game with one of the world’s most popular independent products; fueled with their energy and expertise. We are bringing the Mom and Pops back, complete with education!

Thanks for listening to my rant, I hope you learned a little about the landscape of our business and what fuels my passion!

Whew, glad I got that off my chest!

* This information gained from their 10-K report issued to the SEC

http://investor.sallybeautyholdings.com/phoenix.zhtml?c=203305&p=irol-reportsOther

 

The blueprint of my larger family!

This contains the blueprint of my larger family!

I have been trying to figure how to write about the month of November in the world of Screen Hair Care….and my mind keeps coming back to family.

Nuova Fapam- Nuova Fapam is the name of the Italian company that produces Screen in Italy and I have never seen a more cohesive company. The place is surrounded by energy and excitement. Everyone truly loves and cares about each other. When Yves and I joined our new Creative Director Jason Schwind and a brilliant team of educators, on a Shared Vision trip to Nuova Fapam, they brought us into the warmth of their family and made us feel welcome. They actually placed a variety of American Flags, on our tables. The trip was amazing; we now have an extended Italian Family.

Screen Artist Guild- This month we hired our Creative Director, Jason Schwind. We interviewed many candidates for the role and we found the process to be a very interesting and came across amazing artists. We were looking for a candidate with vision and authenticity. Jason has a vision of how education should look in these times and along with his vision he is an earnest and authentic human being, throwing himself into every project, whether it be the person in the chair or the stylists in his classes.

The Screen Team in our office- Some of you may have spoke to a few of them, they are the most amazing set of people, I want to mention one person specifically, Nancy. Nancy runs our office, and takes care of me, i.e. making sure I eat and I leave the office at a certain time. She is an amazing person and has two brilliant children that she raises largely alone.

(Below see a fun holiday video of our office family!)

My Family- I am blessed with my brother living near me, he and his wife are a terrific couple and some of the best people I know. They have one 4 year old nicknamed “Princess”; she actually wears either a tutu or some other skirt everyday and has a passion for tiara’s. Their other daughter an “almost four year old” is nicknamed The Juggernaut, because she never stops and never cries. My nieces are like Yin and Yang. They are both perfect in completely different ways. I spent part of Thanksgiving Day with them and I bribed their attentions with a 7 pack of Princess Barbie’s. My brother and his wife have so much love to give and their home radiates with happiness. I like to think that my brother is a saint mostly because I was/is more like the juggernaut and he got the brunt of it. (I can turn anything into something about me.)

Yves- my business partner, friend and occasional adversary; you know I would not tease you if I did not love you.

My husband and business partner John- we are perfectly flawed as if we were made for each other; we share the stress and the victories which makes the creation of Screen USA even more rewarding.

We are blessed at Screen and our family is getting bigger every day with new distributors and sexy salons, we love you all and we truly want to help you be ridiculously successful.

May your Hair and your Holidays be fabulous and festive, but mostly full of your families (traditional or not.)

Andrea

Elf Yourself Dance Video

 

Beauty Goliaths

I am definitely not winning any friends at L’Oreal with this blog but I have never been afraid of kickin up a little dirt.

How many beauty brands do you think L’Oreal owns?

Five.. Six? 

How about 26!

Yes, 26 separate brands. They have cleverly hidden all of these different brands under one roof without the consumer or the stylists’ knowing. Many large companies do this to ensure that the consumer stays ignorant of their domination in one industry.

We have all seen the lack of accountability of large corporations lately:  BP Oil Spill, Halliburton no-bid contracts, Goldman Sachs financial collapse, Nike sweat shops, or my favorite, health insurance companies that have ruined healthcare for most of America.

I do have to admit that I am prejudice against large companies, especially if they are publicly traded. My prejudice arouse from the a documentary called “The Corporation.” I had never put much thought into it before; the large corporations are so common that you can easily ignore them: Starbucks, Walmart, Chevron, McDonalds, etc.

I’m including information below regarding the movie…worth the time. But back to the Goliath of L’Oreal…they own the following brands just to name a few professional brands:  L'Oréal Professionnel, Kérastase, Redken, Matrix, Pureology, Shu Uemura, Artec and Mizani.

They ALSO own these drug store brands:  L’Oreal Paris, Garnier, Maybelline New York, Softsheen.Carson, and luxury lines like Lancome, Shu Uemura, and Keihl’s.

And to top it all off…. L’Oreal also owns the second largest Professional Beauty Distributor- Salon Centric (formerly known as Beauty Alliance) and has bought up the following small distributors over the last few years: Beauty Alliance, Columbia’s, Maly’s, Marshalls, Mid City, Ace, CB Sullivan.

So when it comes to Professional Beauty Supplies L’Oreal owns not only the products but it also owns the largest method to getting that product to salons.

Salons are my passion! They are small loving communities dedicated to comfort, beauty and creativity. I don’t think that a lot of salons know the vastness of L’Oreal and all of the hidden competion they have in drugstores (they even have a new Ammonia-Free Color called Natural Match.)

This domination in combination with the diversion (see previous blog) does not give the freedom of choice to the Salon. An independent salon has to hunt and peck to find a honest independent brand.

If you have found this blog then you have found an independent brand- Screen Hair Care. Our line is an Italian, family-owned brand that won’t sell out to one of the Consolidation Monsters. This line will never be sold to L’Oreal (especially after this blog) or P & G (their blog is coming soon.) And since we do not want to be bought, every decision we make is in the best interest of a long term relationship with the Salon.

Thanks for reading…Here is the info on the movie “The Corporation”

Wishing you a good hair day,

Andrea

I highly recommend that you take an hour and ½ to watch this very entertaining (seriously it is funny but it may freak you out a little) documentary-here is a link to their trailer.

http://www.youtube.com/watch?v=7Y9YZxA5uM8

Diversion of Salon Professional Products

I throw up a little bit in my mouth when I walk by the “salon professional” section of CVS or Walgreens. There are too many products and way too much product placement (manufactures have to pay for quality placement) occurring in consumer retail stores. This is straight up diversion.

What is diversion? Diversion is when a product is sold in an “unapproved” channel.

Salon Professional Products are supposed to be sold in SALONS ONLY; there are many reasons for this. Professional products are usually high quality and need to be brought to the market through professionals that can ensure you are using the right product, correctly.

In many cases, manufacturers have been wooing salons for years, even decades, convincing salons to carry their products. During the courting process, manufactures repeatedly say that they are against the diversion of their product ; however, somehow their products end up on drugstore or grocery store shelves creating competition for salon retail.

You see this trend more frequently with the brands that are owned by large corporations.  Loreal, Procter & Gamble, and Unilever own more than 80% of both the salon professional products and the consumer hair products designed for drugstore/grocery retail. They are very familiar with both channels of selling products and are using their drugstore/grocery access to dupe salons out of their promised exclusivity.

Corporations are so busy trying to trick salons that their product gets lost along the way. Salon Professional Products are arriving at drug stores in many back channeled ways.   There is no way to tell whether the products are “real” or counterfeit, and even worse, the products could be stored incorrectly which leads to spoiling or lack of potency. Stores have been able to get away with these practices because most products don’t have a production or expiration date.

The idea of cheating and lying to stylists and salon owners is reprehensible. The averaged stylist only makes $27,000 a year and doesn’t have health insurance.  They need to profit from selling products to pay for their children’s dental care or their mother’s groceries. For the large corporations to prey on hard working stylists shows that corporations are truly unfeeling and use no morality to make decisions.

The diversion problem can be fixed if salons only involve themselves with truly independent companies who have the stylists’ best interests in mind.  Consumers can fight diversion too by only purchasing products from their trusted stylists. Both the salon and the consumer should notice whether the bottles have expiration dates and look for products that stand out. Products with unique and innovative packaging are not sold en masse.

As the Managing Partner of an independent product line Screen Professional Hair Care, I am very passionate about this topic…especially the impact this practice has on Salons and Stylists. Salons are about beauty, creativity and making people feel good.  Companies that prey on the industry should be ashamed!


Written by Andrea Bogdan and Jayne Corso