May 2008
Professional Consultants and Resources, a salon industry strategic consulting company and data source has just completed their 2007 Professional Salon Industry Hair Care Study. The study reveals overall salon industry growth last year was 4.2 percent and hair care soft goods growth was 3.8 percent. This is slightly better than 2006, when the industry experienced its lowest growth in decades. Low growth is hurting a once vibrant and high-growth salon industry.
Some the study’s key findings of the factors that affected the industry in 2007: Major struggle for industry domination and leadership continued after the failed Sally-Regis merger, between the apex manufacturer (L’Oreal), the apex distributor (Sally Beauty / BSG) and the apex salon-chain retailer (Regis). Resulting effects of major distribution realignments, vertical integration and direct sales impacted the industry.
Salon hair-care service revenues registered modestly higher growth, due to burgeoning growth at booth-rental salons. However, this started to affect chain salons negatively. The “Beckham Bob” may just bring back short, sleek, styled hair and resurgence in salon service revenues.
The booth rental phenomenon continued burgeoning growth and propelled sales for open-line products at Sally Beauty stores and exclusive lines at BSG, BAI and distributor stores.
Mega salon stores like Ulta, Beauty Brands, etc., were still a high growth sector and consumed 13.5 percent of all salon industry products.
Direct sales to salons plateaued in strength and volume at 12.4 percent. Aveda, Bumble and Bumble, Wella International, Kerastase etc., all successfully sold directly to salons.
Hair color experienced high growth at 5.6 percent.
Specialty products grew strongly and hair styling boomed again.
Shampoos and conditioners were caught in a low growth cycle due to mass-retail brands and diversion.
Rampant diversion affected the industry and leading exclusive salon lines were available at all major drug chains, Target, Bed Bath and Beyond and Linens ‘N’ Things.
The top three manufacturers for market share were L’Oreal, P&G Professional Care and John Paul Mitchell Systems. Zotos, Lauder and Colomer followed as the next biggest.