One of the great things of being an Entrepreneur for more than 40 years is that you get to watch public companies walk the talk and then see if their results match up to expectations. You can also take advantage of missed opportunities they seem too trivial to pursue.
Best yet, public companies must inform their shareholders quarterly of their financial results, and what analysts want to hear most, future expectations. Based on the current quarter of earning releases to date, one must question the state of the pro beauty business.
Since you are reading this blog, you know my thoughts all along on where the pro beauty business is heading. My two favorite companies in the space, Amazon and Ulta continue to take market share while the traditional companies are struggling more than ever. Listen if Sears Holding is going broke, J.C. Penney is treading water and a Canadian retailer is looking to take over Macy’s which is ten times their size, you know the entire retail picture is changing quickly.
You know salons shrunk by 7% last year and my thoughts are that we will see a similar scenario in 2017. In a classic dilemma of what came first, the chicken or the egg, we have to ask ourselves if salons are closing where are people getting their haircuts? In classic Uber fashion, the industry has always been filled with overcapacity, hence the reason for so many part-time hairdressers and the evolution of booth renters. Walk into just about any salon today and you will see there is still too much capacity so we have a ways to go.
In the meantime you have companies such as Regis reporting negative sales growth and huge drops at retail. Yes innovation has been lacking but consumers are flocking to Ulta to buy their pro hair care items instead of the mall. Sally also reported negative growth with their stock getting slammed. The CEO announced a total restructuring with plans to eliminate up to 150 field managers, cut operational costs and somehow squeeze more margin from their suppliers. But again with beauty schools shutting down along with salons, where will the growth come from when many of the same items are available at THE INDUSTRY SOURCE and Amazon at far cheaper prices.
Bottom line: We are going to see more hair care brands move to alternate distribution as they can no longer rely on traditional methods. And really, how many years has diversion of these brands taken place anyway?
Speaking of the hair business, new items we recently launched that I am very excited about include:
Hair Bobbles are half the price other brands and flying out.
Why spend up to $49.95 for a digital scale when you buy the ForPro model for only $12.99?
I am also loving the new XHI X-Steam Pro Flat Iron & Straightener. It truly is a magical tool for straightening hair in half the time without damage.
As I have stated before, innovation and excitement is alive and well at TNG and to further this statement, I just announced one of our biggest product launches in company history today. More to come on this next blog.