A COUNTRY & AN INDUSTRY STANDING STRONG

A COUNTRY & AN INDUSTRY STANDING STRONG

No one ever will forget the terrible tragedies that unfolded the morning of Sept. 11. Gradually, at the advice of our president, the country is attempting to get back to business--while still reeling in disbelief and sorting through the emotional impact. This month, several indoor tanning professionals offer us their heartfelt thoughts on how the industry has been affected by this national disaster--and whether there is hope on the horizon.

"We have all faced some type of tragedy in our lives and have overcome it. We have experienced loss of family members, friends and other personal devastation. The only positive thing about our current situation is that we all get to face it together.

Although these are uncertain and fearful times, it is now more important than ever to come together not only as an industry, but as Americans. America is the strongest, wealthiest and most creative nation in the world. Now, to see us through these uncertain times, it is most important that we put this creativity to work for all of us.

There is a light at the end of the tunnel that will grow brighter as long as we continue to move forward. This industry will flourish again because of our innovative minds and entrepreneurial spirit."

Mike Lemle, president
BreeZe Products
Largo, FL

"Certainly the tragic events of Sept. 11 will have some negative effect on consumer confidence. This can result in less traffic at our salons, along with other deferred or avoided purchases that go along with worry about the future or the economy. The government, from administration through the Federal Reserve, is actively taking steps to stimulate and improve the economy and restore confidence in the future.

We are lucky to have the ITA expo in Nashville--within driving distance of so many salons if air travel worries persist until the show. Wolff System has no plans to curtail its activities for 2002. Even though we expect a flat year for the industry, the future still looks bright for indoor tanning. Some industry veterans tell me that indoor tanning often does well when the economy as a whole is in a rough spot. That's a positive attitude one can endorse."

Michael Stepp, president
Wolff System Technology Corporation
Marietta, GA

"In the past 20 years, the tanning industry has gone through no less than four economic downturns for one reason or another, so we've been through highs and lows before. We survived the 1987 stock market crash; we went through the Gulf War; and now we have this economic downturn--which truly was occurring prior to the World Trade Center attacks. We've been through it, and in each case, Sun Ergoline (Sun Industries) always has weathered the storm and come through stronger.

In times like this, it's a question of how salon owners address the situation--and the attitude they take--that will dictate whether they will be successful or not. If they go into this with a negative attitude, that's what they're going to come out with. Understand this: Indoor tanning can adapt to any situation. In the good times, indoor tanning is seen as an add-on--it becomes a part of lifestyle. In bad times, it becomes a reasonably priced alternative to the things you had to give up. It's a question again of how the salon markets itself. If it doesn't adapt to the situation, it will suffer. It cannot paint itself as a luxury in the bad times--salon owners have to change marketing strategies to "You deserve a break today" and they'll come out ahead.

They also have to price themselves accordingly. Different things sell depending on the economic conditions. You may have to offer more incentives--we always advise that you never lower your prices, but give more service. There are things salons can do to change the pricing structures to offer that value, and change their approach to the market to reflect the conditions.

If you do things right, you can actually increase your business during these times. This is not to say that it's going to be easy; it's just a matter of the strong always surviving."

Jerry Deveney, executive vice president
Sun Ergoline (formerly Sun Industries)
Jonesboro, AR

"I've been in the industry almost 20 years and we've had recessions prior to this one. During the recessionary period in the early '90s, the tanning industry actually experienced growth. We're part of the beauty industry and the fact of the matter is that people will spend their last $5 to look good.

If you don't believe it, consider the department stores; when you walk in the door, the first thing you see on the ground floor, center, is the cosmetics counters--the most expensive real estate. There is always a line at the cosmetics and perfume counter even if consumers aren't buying clothing upstairs.

The tanning industry is part of the beauty industry. During recessions, salon owners and manufacturers typically see growth, because tanning customers tend to stay closer to home. They may not be going to the islands for spring break, but they're still going to the tanning salon."

Susan Miller, president
PC Marketing
Ridgefield, NJ

"We've been in business about 15 years so we've seen two down cycles--the end of the great 1980s boom and the Persian Gulf War. Neither probably can compare to what we've just experienced; however, history has shown that America typically has a stable economy. If you're looking at the next three to six months, I certainly believe there will be some slow down. However, the government has reacted in a very positive way--not only putting money into the airlines but also trying to stimulate growth across the board--and in 2002, we should be headed in a positive direction.

Now is the time to look at your shop and make sure it's up to par--that your equipment is as good as it can be--because now is the time when the consumer is going to make the choices. And we've found that during the down times, the better salons and the ones that really want to keep track of--and tighten up--their image seem to be the ones that prevail. It's normal to be nervous--to potentially look at some of the areas of 'fat' and where you might be able to trim--but since tanning and lotions are the ways that you make your direct revenue, those are not areas you want to try to cut back on. That's what's going to bring the revenue in your door because during these difficult times, people need to feel better.

The initial impact may be rough, but shortly thereafter, winter and the colder weather are going to be here and people like to feel warm, healthy, good and that they can get a tan then. Things may look bad for the next few months, but salons have to look beyond that to the long run and continue to invest in their businesses, because the economy definitely will rebound."

Kevin Ruane, president & CEO
Neptune, NJ

"Although there has not been extraordinary growth in tanning this year, the industry is still growing at a healthy pace. The salons that come to us for insurance are getting larger and have more management education than in the past, which shows the health of the industry and a bright future ahead."

Chris Beshore, vice president
Insurtec
Rich Hill, MO

"I think it is going to be a difficult season for everybody; however, we are very optimistic. The marketplace is changing tremendously on a daily basis, and those companies that recognize the changes will have a great season. That doesn't necessarily mean the business will grow--it just means market share will change.

This is a pivotal year for all manufacturers and suppliers and those that understand the dynamics in our marketplace will have a very good year. It really comes down to who's out there trying to work the hardest to understand what's going on in our marketplace.

Obviously we're all very disappointed by the tragedy and the economic downturn, but I've always believed that the best time to grow is when things are tough. It doesn't necessarily mean that our business in general is growing as an industry, but I think it's the best time for the people who are well aware of what's going on in their industry to go out there and grow their businesses.

We're looking forward to a great show in Nashville and we're extremely optimistic about the growth for our company in 2002. Everybody needs to take time to reassess their company and the marketplace."

Bill Pipp, vice president of sales
ETS, Inc.
Indianapolis, IN

"We have a lot of veteran players as customers that have been in this business a long time and they realize the world still has to turn and that something such as this--as tragic as it is and as bad as everybody feels--has to be overcome or they've won and we've lost.

Our customers are trying to move forward, maybe not with the same zeal they had a few weeks ago, but they realize the economy has to continue; the world has to keep turning; and business is still pretty good--or as normal as can be--under these conditions.

Ricky Gray, president & CEO
SonnenBrune
Ringgold, GA

"We're probably going to go into a recession; however, the beauty industry--of which tanning is a part--is almost recession-proof. No matter what problems are in the world, Americans always are going to want to look and feel good. Although they may feel down on the inside, they do what it takes to look great on the outside."

I. Jay Bernstein, national sales manager
Body Drench
Scottsdale, AZ

"Because there are so many places and people gathering contributions locally, my husband and I decided to donate to them and left it at that. As for how business is going, I can tell you that on Sept. 10 we had a very good day at our salon; however, we have seen a drastic reduction in our business since Sept. 11. I think that this has to do with the effect of the terrorist attack on our already shaky economy rather than that of the attack itself.

I did a report from the week of Sept. 10-16 and compared it to the same week last year, and our business was down by 300 tanners. And, it isn't from lack of support--we were voted 'best tanning' salon in our town this year. I am really concerned about what effect this all has on our already unstable economy."

Bobbie and Tommy Case, owners
Tans-R-Us
Corinth, MS

"I have noticed that the salon is slowing down, but because of my location in Michigan and the hours I have, I still should do outstanding business. The way I see it, no matter what's happening in the world, everyone needs a break!"

Barbie Iles, owner
Tan Ya-az Tanning Salon
Battle Creek, MI

"I found it interesting that the first days of the tragedy, the people that were coming into the salons were coming in to get away from the television and the news. Even some of the professionals that come in at lunchtime were just looking to get 20 minutes of quiet time to make themselves feel better. The fact that tanning makes you feel better, combined with the serenity of our salon, is a winning combination.

As far as people and the economy, we have a recurring base of income from having so many EFT (electronic funds transfer) customers. What we've seen so far is that a few people have cancelled, but a lot more have asked us to put their accounts on hold or into stay-and-save mode. We allow them to hold their account for quite a while at a minimal charge every month--so there's still a source of income for us but it's not too much of a burden for them.

Personally, I think the outlook is good. Once they catch Osama Bin Laden, the economy is going to react and all the other dominoes will fall into place. President Bush is obviously a very strong force.

Tanning is a unique business because people want to look good, feel good and escape from the day to day headaches. Will we see record numbers this year? Probably not. Will we see a good, solid year? Sure. The 2001 tanning season started off cold, but picked up steady steam. People have to learn that they can't just spend what they make or they won't be ready for a situation like this."

Brad Salley, president
Super Tan
Lubbock, TX

"I've found that our business continually goes up as long as we keep feeding back into it--with better equipment, better service--and it doesn't really matter what the economy is doing. If people decide they're not going to fly on airlines and they're not going to take those three trips to Florida every year, what are they going to do? Are they just not going to look good and feel good about themselves? No, they're still going to workout, get their nails done and continue going to a tanning salon.

It's all about having a positive attitude--you really have to present that image for your employees so they can, in turn, present it for the clients. You have to keep moving forward--you can't look back and you can't change things, so all you can do is whatever it takes to make your business go to the next level.

We're just now signing a lease on a space--our fifth store--and it's less than one mile from the Pentagon; it kind of overlooks it. It's a no-lose situation. People ask me if I'm afraid it's not going to work but they don't realize that you don't approach these things haphazardly; you do your homework to make sure it's going to work. It's not even a question of whether it will work. You can't second guess yourself; whether it's the right employees or the right location, you do the research first. If you know exactly what you're looking for and then you find it, that's 90 percent of the game. Then it's just a matter of fulfilling what you need to do to get to that point.

I just don't ever even consider making a bad mistake. By the time I make a decision, I've invested enough time and thought into it that I know it's going to work. Having 13 years of experience under your belt helps too; you know--live and learn."

Jeff Bennett, president
Casa Del Sol Tanning Club
Washington D.C., VA, MD

In light of the Sept. 11 events, I feel very confident about the upcoming season. The remainder of the week of the disaster was a very slow time for us, but we got back to normal business faster than we anticipated. The rest of the month was right on target from previous Septembers.

We went forward with plans to open another location on Nov. 1. I feel growth is the only way to portray confidence in our country's economic development. We have to spend money, in order to boost the economy.

Andrea Morgia, co-owner with Thomas Horning
Golden Image Sun Center
Watertown, NY

As the owners of four tanning salons, and a Sun Ergoline distributorship, we are located minutes from New York City. Two of our salons are in Hoboken, N.J., which is located between the Lincoln and Holland Tunnels and also the main subway link between New Jersey and New York City. In fact, one train goes directly from Hoboken to the World Trade Center.

The tragedy touched so many people--40 Hoboken residents alone were lost at the WTC--five of those were active customers of ours. Looking at their profiles, they all were very young and just getting started in their lives.

Business at the Hoboken stores for that week was down; however, it soon got back to normal and actually saw a 10 percent to 15 percent increase is the number of daily tanning sessions. Many customers came in to relax and get away for a few minutes. Life does go on, but you feel guilty in a strange sort of way that more than 5,000 innocent people perished.

As far as our distribution business, getting around to see customers has taken much longer to accomplish since 95 percent of our customer base in across the George Washington Bridge. Traffic has been very slow going--it took me four hours to complete a 26-mile trip three weeks after the attack.

Bill Kron and I met 25 years ago at the Hoboken Volunteer Ambulance Corp. where we were both EMTs. Given our proximity to New York City, the Ambulance Corp. responded to the WTC and lost quite a bit of equipment while attending to the injured. Sun Ergoline and Global Sun Light, in conjunction with Planet Sun, Inc., is donating $2,500 to the tragedy. We suggested the money be used to replace the Hoboken Ambulance Corp. equipment and to the memory of our customers and Hoboken citizens who perished.

Al and Mary Palumbo, Bill Kron owners
Planet Sun Tanning Salons, Inc. and Atlantic Tanning Distributors Inc.

Hoboken, NJ

Since the attack sales have been down, but my outlook is more than positive for the 2002 tanning season. Most business advisers would suggest that tanning would be hit hard since it is classified as a luxury, but as most of us know there are many tanners who consider it a necessity. In order to keep the industry strong, we all must move forward and continue to promote positive tanning ... Hey, "United We Tan!"

Brooke Bills, owner
Midnight Sun 24 Hr. Tanning
Tulsa, OK

"I expect that as I've already seen--a lot of the single tanning salon owners are going to go out of business. I had calls from five owners in that situation in the last month and I'm going to acquire several of those salons. Those five salons are all in the same situation; the economy was slow to begin with and then when you added the traumatic experience, it finished off the marginal businesses. Even though they probably would have done fine if they could have waited it out, the cash that they would have had to put in to make it float through the busy season was substantial.

It seems like almost all tanning salons lose money in the summer. And when you've got a recession like this and people are not flying, a lot of the people that are tourists and need to come in to get a tan before their vacations--or after--get stuck with not being able to fly and that's going to cut into sales. My company will survive only because we are large enough to sustain it. Morale keeps improving the farther we get from the tragedy, but I'm sure sales will be weak for a couple of months to say the least.

We went to the Vegas show and had a blast there, but we have cancelled our plans for Tennessee. I am smart enough to conserve during the tough times. Although we have a great time at the shows, I have to cut back on anything I can do without."

Michael Poggi, president
E-Z Tan
Boca Raton, FL