Posted : 09/01/2001
Celsius Tannery Inks Franchise Deal With Wal-Mart
First Store Set To Open This Month
by Karen Butler
Recently, the world's largest retailer--Wal-Mart--signed an agreement with Celsius Tannery to bring indoor tanning to its Supercenters nationwide. The first in-store salon is set to open this month in the new Wal-Mart Supercenter located in Salina, Kan.
This unprecedented business move not only puts Celsius Tannerys at the forefront of a new era in the industry, but thrusts indoor tanning into the masses, allowing for even more consumers to embrace indoor tanning.
The Sun's The Limit
Six years ago, when Scott and Cynthia Altizer and Kathy and Roger Holmes were preparing to go on a vacation together, the couples unknowingly bought each other the same present--gift certificates at the local tanning salon.
Ranging in skin types, the group was amazed that each achieved a base tan in three visits or less. Intrigued with the salon concept and convinced they could do it better, the couples went on to create what is now one of the most innovative and successful franchises in the industry.
In its first five years, the business operated under a licensee program; however, in the winter of 2000, it converted to a franchise system--which all of its former licensees joined.
The Celsius Tannery franchise--much like the indoor tanning industry--is not just expanding; it's exploding. In six years, Celsius Tannery has grown from one salon with three high-pressure beds to 19 salons in three states--plus five additional locations scheduled to open this season.
One of these is the coveted Wal-Mart Supercenter location in the college town of Salina, Kan. After less than one year of negotiations, the professional tanning salon franchise will be the first to open its doors--not in just any retail establishment--inside the largest retailer in the world.
Perhaps more remarkable than this feat is Celsius Tannery's exclusive choice of additional Wal-Mart Supercenter locations in which to set up franchises nationwide. In a short time, the salon could--and probably will--have salons in every major city across the United States.
Competition Breeds Higher Quality
"This accomplishment is not just exciting for our company, but for the industry as a whole," explains Rosenberg. "Tanning can go to a whole new level now that we'll have the opportunity to raise the degree of acceptance--as well as credibility--of the industry."
Although some observers may think Celsius Tannery has it easy by being the first franchise to set up shop in a mass retailer, the venture actually required meticulous groundwork, including large investments of time and money.
Before the deal was sealed, Wal-Mart's decision-makers had countless meetings with Celsius Tannery's corporate leaders, including tours of all its salon facilities. In Rosenberg's opinion, "Above and beyond, the reason Wal-Mart chose Celsius Tannery is because of the way we do business--across the board, we're committed to incomparable customer service, education and cleanliness."
Celsius Tannery hopes its achievement will create a favorable atmosphere for everyone in the industry, not just itself. Although the company will retain rights within the Wal-Mart Supercenters, it maintains that there are plenty of opportunities for every tanning salon that's out there.
The visibility and accessibility tanning will gain will benefit everyone in the business, especially those striving to give customers the utmost in quality. Rosenberg explains it in terms of increasing customer awareness about what to expect from the industry.
"If you're not a tanner, you might be hesitant to go into a salon," she says. "But when you're waiting in the checkout line, peering across 25 registers and you see a faint neon purple glow coming out of an immaculate store with professional employees and gorgeous product displays--you'll be more apt to walk through that door.
"Once newcomers have sampled what we offer, other salons will have to have better beds, cleaner facilities and greater accountability to their customers; don't we want that in the industry?" she asks.
Dispelling Myths
 Roger Holmes, Mimi Rosenberg and Scott Altizer |
In the event that any onlookers--either silently or aloud--have questioned Celsius Tannery's retail move, perhaps a quick review of the facts will dispel any concerns.
For starters, the franchise requires professional tanning consultant certification and ongoing education of all its employees. Those working in the Supercenter locations are hired by the tanning franchisee, who has not only passed corporate's inspection, but also invested time and money, thus buying in to the desire for success. Rest assured, customers will receive the same high-quality service regardless of which franchise location they visit, says Rosenberg.
Celsius Tannery strictly enforces its tanning policies. Although customer retention is a priority, the rules aren't bent for anyone. Customers must be skin typed, wear protective eyewear and cannot tan if they have had melanoma, are under the age of 16 or pregnant. The industry needs the assurance that a salon that will enforce these standards represents them in this retail debut.
Business-wise, entering the retail arena will gain unimaginable exposure for the entire industry. Good business sense (in any field) dictates that one of the most important elements for success is location. When new Wal-Mart Supercenter locations open, you can bet research has identified the area as a hot spot. Whether a salon was going to open a freestanding salon or inside a retailer, it couldn't ask for better demographics.
If the fact that it's always tough to find a parking spot at Wal-Mart isn't enough to prove it, statistically speaking, more than 100,000 consumers pass through a single Supercenter location every week. The company's first-quarter earnings for 2001 set new sales records, boasting $1.38 billion in net income. Besides its current accomplishments, an additional 400 stores are scheduled to open by year's end.
Wal-Mart's retail success is due in large part to its commitment to customers. The products and services it offers are not cheap, but value-driven, and definitely--in demand. Other business offerings that have joined the conglomeration range from dry cleaning and hearing aid services to nail and skincare. All of these companies--including Celsius Tannery--offer their services at prices indicative of their respective markets, not a discount store.
In addition to meshing with Wal-Mart's retail panache and customer-oriented mode of operation, Celsius Tannery shares a firm belief in giving back to the community that supports them. Wal-Mart has an entire "We believe good works" campaign that donates regularly to various children's organizations and educational programs, as well as the community, economy and environment.
Celsius Tannery has made charitable contributions an ethical cornerstone of its business. Its tan van--dubbed the SPF Patrol--visits major outdoor events, educating the public and handing out complimentary John Abat SPF products and coupons for free indoor tanning sessions.
"Everywhere we go, we want to push the benefits of getting tan in a protected environment as opposed to the damages that can arise from uncontrolled exposure to the sun," says Rosenberg. "Not only does it build profitability, it also helps show people that we care about them inside and out."
The philanthropy only begins there. Employees--and top management alike--not only raise money, but also participate in charity events, contributing thousands of dollars annually. Some of the benefactors include the American Heart Association, schools, churches and medical research for AIDS and arthritis.
Celsius Tannery is a member of the Chamber of Commerce in every city that has one of its salons. The franchise is particularly active in its hometown area, Kansas City. In June, Celsius participated in the grand opening of the Kansas Speedway, debuting its own corporate racing team and car.
In addition to competing in other speedway races, the car will cross the nation promoting the salons. Scheduled appearances include the openings inside Wal-Mart Supercenters--where a racegear-clad driver will hand out toy cars to children. Realizing the importance of fostering the well-being of kids, with each of these celebrations, Celsius Tannery will donate $5,000 to either a children's hospital or pediatric ward.
A Shining Star
In June, Rosenberg, who also hosts a radio talk show, "Woman to Woman," won the city's Citizen of the Month award. She credits much of her success to the privilege of getting to work with--and become a part of--the Celsius Tannery family.
"Scott [Altizer] and Roger [Holmes] have had the most amazing power of insight into the tanning industry," she explains. "They were innovators when they started--seeing a need and then putting profits back into the business so they could keep it growing and improving."
Rosenberg also believes that keeping a corporate salon--adjacent to the corporate offices--has been essential to the company's current success and future potential. New franchisees assume virtually no risk, as nothing--from equipment to lotions to policies--is at an individual salon unless it has been proven effective at the corporate location.
The company follows strict policies and screenings to ensure accountability from new members and to continue operations with a perfect record. As Rosenberg points out, "We want to bring in only the highest-quality franchisees. They have to be financially stable and undergo rigorous screenings--we owe that to our current franchisees."
Opportunities to join the franchise will fuel much growth in the industry. The company foresees limitless area development--planning to open additional freestanding Celsius Tannerys near each Wal-Mart salon location.
"The Supercenter stores are merely going to be an appetizer," she says. "Once people experience our facilities, they're going to want the main course--and they'll have gained the confidence to visit salons outside of the retail environment."
Very little differs between a Wal-Mart location and the freestanding salons, with the exception of showers, which are only a part of the latter. Celsius Tannery wanted to maximize its 896-square-foot allowance inside the Supercenters, so it established a uniform nine-bed turnkey setup, featuring the company's patented, three-level Sequential Tanning System (STS). The two freestanding franchise options--larger, to accommodate showers--are for 10 beds and 20 or more beds. As compared to the Wal-Mart, the largest salons have had the luxury of occupying as much as 4,000-square feet of space.
All locations have an upscale, spa-like atmosphere, showcasing a classy selection of retail items such as candles, soaps, sterling silver jewelry and John Abat International and Celsius Tannery's private-label lotions. Celsius units provide three levels of high- and low-pressure tanning, configured in stand-up and conventional beds. Daily, weekly and monthly maintenance inspections are conducted and recorded for reference.
Because the Supercenters are open 24-hours a day, they do facilitate a more unique environment in terms of the work day. Although specifics may vary by location--and season--Rosenberg anticipates the salons will be open seven days a week, from 6 a.m. to midnight. Since its STS's maximum tan time is 10 minutes, she doesn't believe that appointments will be necessary.
By far, the most amazing aspect of the Wal-Mart salons is Celsius Tannery's plan to provide all customers with the opportunity to experience three free tans.
"We want people to experience all three levels of our equipment so they can make an intelligent decision on which method is right for them," she explains. "How can we expect all these new customers to buy something before they know what it is? They need to see, touch and feel it for themselves."
No Guts No Glory
As Celsius Tannery has evolved, so too has its staff. What started as two couples and an idea has expanded into a current team of more than 20 leadership positions, including the creation of--and need for--a daily operations manager and a CFO.
With the national franchise expansion, the company will continue to grow, training core people to help oversee regional development and operations. Celsius even has documented much of its educational philosophy and training into presentations for easier accessibility.
Despite all the energy necessary for a successful expansion plan, one of the current corporate priorities is developing a full benefits package. Rosenberg points out, "Finding enough qualified, accountable, dedicated people can be a challenge, but it is a very workable one. If salons aren't retaining employees, they're either not paying enough or not providing the benefits that allow tanning to be a career instead of a job."
Celsius Tannery is all about developing careers. It is run by a group of intensely good business people who have given of themselves to take the industry someplace it's never been before. They view the Wal-Mart expansion as a mutually beneficial situation between retail and the entire tanning industry.
Partners Altizer, Holmes and Rosenberg are thrilled with their grand undertaking. They view life as an adventure and believe they can do anything together--and would only regret if they had not had the guts to try something new.
"We're a little different than the norm; we go for uncharted waters," explains Rosenberg. "It's okay though," she grins, "It's a beautiful day, and we're all great swimmers."
