Conversations with the Industry

Conversations with the Industry

With the 1-year anniversary of the Sept. 11 terrorist attacks recently passed, we pause to reflect what those terrible events did for us as businesspeople--and also just as people. In this month's Conversations With The Industry, we hear from industry professionals for their takes on the events and how they and their businesses have been able to cope.

Through Conversations With The Industry, LOOKING FIT hopes readers may better understand how day-to-day events affect each person and business. If you would like to express your view of hot topics happening in the indoor tanning industry, please visit www.lookingfit.com. Verified comments and opinions may be posted online and/or printed in upcoming issues of LOOKING FIT.

Describe how the Sept. 11 tragedy has had an impact on the industry as a whole and your company in general.

"Sept. 11 has had a significant adverse affect on banks' willingness to lend money, especially in markets like tanning and haircare, which they perceive as high risk. Only companies that are financially strong and well managed will be able to access reasonable amounts of capital to fund the continued growth of their businesses. The economy is still a big question mark. While things are improving slowly, dramatic gains will be difficult to achieve unless a company can take advantage of their competitors' weaker position. Strong companies in a down market have great opportunities for growth."

--Tim White, vice president of sales
Evans Leasing Services, Inc., Hiawatha, Iowa

"Subsequent to the Sept. 11 attacks we have certainly seen a big drop in air travel. Possibly this curtailed vacation plans for some, with the result being fewer pre-vacation tanners. The lengthy war on terrorism, which involves most government agencies and is so widely reported in the media, adds a feeling of uncertainty. I suspect many potential investors in the tanning industry, whether they consider expansion, equipment upgrades or opening their first salon, are taking a go-slow approach. The general concerns about the U.S. economy are making negative contributions to the historic robustness of the U.S. indoor tanning industry."

--Michael Stepp, president
Wolff System Technology Corp., Marietta, Ga.

"As with many people, the tragedy of Sept. 11 affected me profoundly. The idea that terrorism could cross oceans, spill American blood on our soil and change our lives so completely is difficult for me to believe, even today. Like most people, I find myself more appreciative of the important things: life, love and family. We still go about our daily business of living and working, but it is different. I kiss my wife and kids every chance I get and never pass up an opportunity to tell them I love them. We still need to make a living and pay our bills but, somehow, closing that big deal is not quite as important as it used to be. I miss the innocence of 1985, 1986, 1987."

--Greg Henson, president
Heartland Tanning, Inc., Lee's Summit, Mo.

"It's hard to believe that an entire year has passed since the attack on the World Trade Center on Sept. 11. For those of you who don't know, I was a New York City firefighter. Quest, together with our manufacturers, distributors and salon owners, was able to raise more than $500,000. We donated all funds to the Widows and Orphans Fund of the New York City Fire Department, and Quest would like to thank all those who participated.

"Sept. 11 had an immediate impact on the whole country. You can't imagine how it was for me having to watch the towers fall and knowing how many friends and co-workers I knew who were trapped in those buildings. The days I spent at ground zero didn't leave me much time to think about my business. The only thing I cared about was the people who lost their lives. I didn't call work for at least a week. I spent seven days at ground zero and then realized it was time to go home to my family and back to work. Our business seemed to slow down the very next day. It progressively got worse as the days passed. I can remember days when I only received a few phone calls a day; I usually get 50 to 75.

"Most people were reluctant to make any large capital purchases. New equipment for small businesses wasn't important. Most beauty, spa and tanning salons I spoke to were worried about the future and how it would affect them. We soon started getting phone calls from salons to see if we could get our bank to allow salons that needed help to skip a few payments until things got busier and they got back on their feet. Our bank was more than happy to assist these customers. The months that followed seemed to drag along. Many distributors I spoke to said they were terribly slow and business was off 20 percent to 40 percent. Our business follows the distributors. Most of our leads come from them, so we were feeling the slowdown too."

--Jeff Grissler, national sales manager
Quest Resources, Inc., Neptune, N.J.

"It would be an understatement to say that the events of Sept. 11 didn't have a significant effect on every industry--including the indoor tanning industry. For ETS, it brought to light that unfortunately we are never really in control of our destiny and the best way to manage your business is to realize that the unexpected can happen and to plan accordingly.

"The events of Sept. 11 had a bonding effect on all of us at ETS, as we were exposed to the suffering of so many innocent people and the horror that even Americans are susceptible to terrorism in our homeland. I believe it made us a stronger company because we pulled together and re-examined how we would plan for the near term in light of the tragedy and the effect it would have on consumers, investors, lending institutions and the economy in general."

--Bill Pipp, vice president
ETS, Inc., Indianapolis

"The Sept. 11 tragedy had a profound impact on the way business is conducted in this country. I do not believe you can take a couple trillion dollars out of an economy and expect the indoor tanning industry to be just fine. The growth we have experienced has been from assisting our current customers with various marketing programs and extensive sales training both in person and via our unique tele-training program, as well as adding new customers."

--Charlie Clour, CEO
T.W. Tan, St. Cloud, Minn.

"Almost everyone in every type of trade was affected in some way by Sept. 11. For the tanning industry, a slowdown in the economy means less money to spend on what people consider luxury items. That equates to less time at the movie theaters, less time eating out and, of course, less time tanning. What we must realize as an industry is that if this recession had not occurred because of Sept. 11, it would have occurred naturally in the ebb and flow of the economy at some point in the near future."

--Jim Jones, vice president of sales
SonnenBrune, Inc., Ringgold, Ga.

"The overall U.S. economy had been weak prior to Sept. 11. The impact on our industry was certainly felt immediately, as in most businesses. Although it took awhile to overcome the initial shock, we took a collective breath and decided to return to our practices. I believe at the salon level, tanners returned, but they became more selective regarding where they were going to tan and on what type of equipment."

--Joe Schuster, vice president of tanning products
Light Sources, Inc., Orange, Conn.

"I think the Sept. 11 tragedy triggered a series of related and unrelated events that slowed the annual growth we normally enjoy. The Sept. 11 attacks had an immediate effect on air travel and the economy, both of which impacted our industry; annual vacations were canceled because people were afraid to fly or afraid to spend."

--Dan Humiston, president, Indoor Tanning Association;
president, Tanning International, Springville, N.Y.

"Sept. 11 affected our industry in the same way it affected the whole world. It put the country into a 'stop, pause and think' mode--a 'stay at home, less dollars turned for everybody' mode that sent the economy into a major downturn. According to the distributors that I do business with, which is my heartbeat, and also the salons that call in, the industry was down 15 percent to 20 percent as a whole because of Sept. 11. The people I communicate with attribute that to the fact that September is when the season first kicks off and really gets the inertia rolling and going, and it got a real late start last year. People just weren't out spending money like they would otherwise. My sales and my company are directly affected by the traffic through the salons. The funny part is that we actually doubled our sales this year. If it weren't for Sept. 11, we think we would have tripled our sales."

--Rick Norvell, president
NORVELL/BodyInvest LLC, Alexandria, Tenn.

"We have not seen any noticeable effect. We are actually ahead of our budget numbers for this year and last year. I don't know if Sept. 11 had an impact on us. Would our numbers have been higher than they are right now? I don't know."

--Troy Cooper, CEO
Mystic Tan, Inc., Addison, Texas

"We were impacted by Sept. 11 immediately. Our business declined by 36 percent. We are continuously doing promotions but the combination of Sept. 11 and the poor economy was a double whammy. It's been a horrendous year. Forty percent of our business is based on tan-before-you-travel, and when people aren't traveling, they aren't tanning before they travel. Barring another city tragedy, and if the economy gets back on track, we'll be better. I try to stay optimistic about it."

--Sam Brougher, owner
Great Tan, New York, N.Y.

"Until Sept. 11, it was shaping up to be a great year for us. In the aftermath of the tragedy, we definitely felt the impact of the economic repercussions. We were affected dramatically right after the tragedy and through most of this year. It's really been disappointing on many fronts. A successful spring and summer season really depends on the weather and we didn't have weather conducive to a good season, so it was kind of a double hit for us. It seemed like every weekend was a beach weekend."

--James Oliver, vice president
Beach Bum Tanning, Queens, N.Y.

"We were in somewhat of a recession to begin with and then Sept. 11 just put the icing on the cake. It took about five months before we really started to see a difference."

--Dominick Ameno, manager
Midtown Tanning, New York, N.Y.

Is the situation getting better? What do you forecast for the 2003 season?

"At Evans Leasing Services, we anticipate our growth in 2003 to be between 20 and 40 percent."

--Tim White, vice president of sales
Evans Leasing Services, Inc., Hiawatha, Iowa

"The fourth quarter of 2001 was somewhat slower than normal for many in the industry, including us. This year started out OK and continues, though the entire industry seems off a bit. Of course there are some bright spots. For 2003, we should expect continued consumer uncertainty. There seems to be no major event on the horizon that would give the entire economy a shot in the arm that would be good for industry growth. On the other hand, there seems to be no shortage of gloom and doom reporting by the national media, adding to consumer uncertainty. The indoor tanning industry in 2003 will see well-managed companies continue to prosper during a relatively flat period in our history."

--Michael Stepp, president
Wolff System Technology Corp., Marietta, Ga.

"Although America has been dealt a cruel blow, most people are determined to go about their business and return to their routines. Resuming normal activities, like visiting your local tanning salon, is part of the healing process. We have struggled the last 12 months as a nation and as an industry, but the future is bright. The ITA is working hard to protect your right to tan through research and lobbying efforts at the federal and state levels. I predict a banner year for the industry and I am proud to be an American."

--Greg Henson, president
Heartland Tanning, Inc., Lee's Summit, Mo.

"Things seem to be picking up and I think overall this year will turn out to be decent. Considering the state of the economy, the tragedy of Sept. 11 and the fact that our country may go to war, I must say that I can't complain. Good work ethics are a must to survive. I have personally gone out and seen most of my good customers to let them know it is business as usual. The forecast for 2003 isn't much better. Until the U.S. economy stabilizes and the threat of war is behind us, I don't think things will change much."

--Jeff Grissler, national sales manager
Quest Resources, Inc., Neptune, N.J.

"They say that facing a crisis makes you stronger, and I believe that's exactly what has happened to ETS and our country. One year later we are extremely optimistic about the upcoming tanning season for ETS, as well as the tanning salon community, and we look forward to another exciting year in our industry."

--Bill Pipp, vice president
ETS, Inc., Indianapolis

"I believe things can and will get better. Whenever business owners experience a difficult year, they have to make a concerted effort to promote themselves. Many of the salon owners I have talked to this year are stepping up their efforts for the 2003 season.

"Manufacturers, distributors, and salon owners must continue to promote the positive aspects of our industry. I feel very confident that this coming year will be successful."

--Charlie Clour, CEO
T.W. Tan, St. Cloud, Minn.

"The strong companies--the ones that have the vision and stamina to make it--will come out of this recession stronger than they were before Sept. 11. Looking at the number of purchase orders and catalog requests received at SonnenBrune over the past few months, I would say the worst is over for the salons and manufacturers. People are once again spending more time involved in recreational activities. They are going on vacations, concerned about their looks and more or less getting back into their routines."

--Jim Jones, vice president of sales
SonnenBrune, Inc., Ringgold, Ga.

"Things are looking up for 2003. We had a pretty decent busy season and we are looking forward to picking up even more when the season hits. The future looks bright."

--Dominick Ameno, manager
Midtown Tanning, New York, N.Y.

"I have written that in order for salons to survive during the upcoming year, they would have to do things differently than the previous year. Salons would need to increase their level of customer service or upgrade to a newer or larger bed with more options. Tanners are still coming to salons and spending money, but are becoming more selective. However, for many who chose not to upgrade the services and equipment, or increase their marketing and advertising, they probably saw their business level drop off in 2002 and may be headed for the same in 2003 if they stay on this course."

--Joe Schuster, vice president of tanning products
Light Sources, Inc., Orange, Conn.

"I've seen a steady increase in comp store annual comparison throughout the summer, which is a good indication that things are back on track. I am confident that 2003 will be a very good year."

--Dan Humiston, president, Indoor Tanning Association;
president, Tanning International, Springville, N.Y.

"We think 2003 will be great. We are optimistic for the industry and the growth we're seeing in our own company. Hopefully the economy will improve and we will continue to grow."

--Troy Cooper, CEO
Mystic Tan, Inc., Addison, Texas

"We're all very excited about the coming season. Our customers, vendors and suppliers are excited about the new season. The Nashville show is right around the corner and the mood is one of contagious optimism. Our plans for 2003 are in place, the 2003 catalog imminent, and we can hardly wait to introduce our new lines. PC Marketing is bullish on the indoor tanning industry for the 2003 season and well beyond. The up-tick has already begun."

--Susan Miller, president
PC Marketing, Ridgefield, N.J.

"I totally believe things are getting better. Our phone is ringing constantly from salons that have seen my line in the past and they are getting themselves established and thinking about what line they are going to be carrying next year. I feel like it's going to be a great year."

--Rick Norvell, president
NORVELL/BodyInvest LLC, Alexandria, Tenn.