As of press time, the 2008 indoor tanning season was well underway and salon owners were hoping for a strong start to the season. Statistics gathered from the 2008 Top 250 Salon surveys reveal that the 2007 season began in January and February, and remained steady through June for many salons. Even better, the majority of salons reported that the season began earlier than usual— December 2006—and remained strong through June. Last season was a pivotal one, and everyone from salon owners to manufacturers, distributors to allied companies all played an important role in the future of our industry. Recapping ‘07 The State Of The Industry Report ’07 was published last September and provided a comprehensive analysis of the season. The report took an in-depth statistical look into a number of issues that influenced the industry as a whole and provided a detailed analysis of what was occurring at the salon level. The report examined specific areas affecting the entire industry—some areas, such as weather, war and economy were uncontrollable, while others, such as how to market tanning, provide services and stand together as an industry were controllable.The 2006 report, titled “An Industry At A Crossroads, Where Is The Tanning Industry Heading?”, outlined why the 2007 season would be pivotal for everyone in the industry—from salon owners to manufacturers, distributors to allied companies—and by all accounts, that forecast was right on target. Just as in 2006, constant variables like the economy, weather, war and gas prices continued to influence the direction of the industry in 2007. However, this year’s report zeroes in on two other important variables we began to notice a few years ago—consolidation within the indoor tanning industry and increased antitanning legislation aimed at hurting the welfare of this business. Mergers & Consolidations Of particular interest is the changing face of the indoor tanning industry. For years, we have predicted industry consolidation, mergers, buyouts and closures, which are common occurrences in a maturing market.Last year’s issue—forecasting increased merger and consolidation activity—was barely in the hands of salon owners when the predictions started becoming reality. The “thinning of the herd” trend that started in 2006 continued in 2007, touching salons, distributors, suppliers, manufacturers and allied sectors. Decreased margins and intense competition made the 2007 season difficult across the board. Some industry veterans closed their doors or sold out, while others are mapping out a plan for survival. Just like 2006, even the seemingly unshakeable large manufacturers and full-service distributors were affected; however, they held their market share thanks to solid salon relationships and enhanced customer service, financing and Web-based initiatives. Traditionally, industry experts have agreed that tanning salons have a 20-percent annual attrition rate. However, continued economic woes have increased that number to approximately 30 percent. In 2007, many independent salons also were acquired or simply took down their shingles. Sadly, a number of veteran salon owners who helped define and grow this industry either sold, closed shop or set out on new journeys. The trend of franchising and large chains continued in 2007. Franchising has taken on a larger role in the industry, mostly due to solid marketing plans and sound financial resources to help franchisees. On the other hand, a majority of independent salons reported average growth and some are in the middle of expanding existing salons or opening more locations. Consolidation and acquisitions really started to heat up in 2006; therefore, it is important to mention some of the transactions that occurred.
|
Email this article
Add a comment
Printer version
Order reprints
RSS Feed
Bookmark article