June 2008

Mike Nave

Industry Insider | by Mike Nave


Industry Scoop: Sweepstakes, Retiring Icon, and Anti-diversion Effort

— DOES YOUR SALON NEED AN UPDATE? Here’s your chance to win a free salon makeover courtesy of Redken.

To promote Redken and Peter Millard’s book Reinventing Space: The Clear Logic to Successful Salon Design and Retail Merchandising, Redken announced the “Reinvent Your Space” salon makeover sweepstakes. One grand prize winner will receive a Redken makeover designed by Peter Millard.

“Successful merchandising can increase retail business and drive additional traffic into salons,” explained Constantina Tsavekou, director of merchandising for Redken. “We’re excited to help salons reach their next level of success by reinventing a new professional salon environment.”

From July 15 through August 31, salon owners can visit www.redken.com/Reinvent YourSpace for rules, to submit application forms, salon photos or videos, as well as a 500-word essay describing why their salon needs to be reinvented.

— LAST MONTH INDUSTRY ICON Robert Lobetta retired after 22 years at Sebastian, with 11 of those years as its creative director.

Sebastian Professional said it would continue to work with Lobetta to identify future opportunities for collaboration. “Robert has had an indelible impact on the Sebastian brand and the industry,” said Robert Jongstra, Global President, P&G Professional Care. “His vision, creative passion and energy have helped inspire a generation of stylists and we greatly value his artistic contributions to the industry.”

Explained Lobetta, “In life, the only constant is change. It is with this belief that I have, after much deliberation, decided to retire from corporate life and embark on a new journey of discovery. I am very proud of what the Sebastian brand and I have been able to accomplish together.”

Lobetta’s 35 years in the hairdressing industry and his achievements in the world of hairdressing have earned him many industry accolades. He’s been a salon owner, a stylist, a product creator, a public speaker, a photographer, a director and an artist.

While P&G did not name an immediate successor, the company said it would continue to work with emerging style visionaries who have helped fuel the brand’s inspiration for more than thirty years.

— TACKLING THE SALE OF PROFESSIONAL products in unauthorized venues has been important to P&G since it entered the professional industry with the acquisition of Wella in 2003. According to Kevin Otero, general manager of P&G Professional Care North America, “Susan Arnold [P&G vice chairman, Beauty & Health] was very supportive of us cleaning up the professional market to protect the growth of the brand and to protect the salon channel and its integrity.”

Otero said that from 10 to 30 percent of a salon’s revenue comes from the sale of products, and because of the sales that diversion takes away from traditional outlets, many salons go bankrupt each year. Diversion, he said, can be attributed both to salons selling product out their back door to unauthorized retailers, as well as to distributors who sell product to vendors outside their regular salon and professional network.

After learning these facts, P&G decided to make diverting products more difficult. As they present Sebastian’s new lineup to new salons, they also show them an independent contract stating that, if they divert any Sebastian items, they would be responsible for a financial penalty. The Sebastian contract is not new to the industry, Otero said, but P&G’s intent to follow up on contract breakers is serious. “I know others in the industry do [require a contract,] but what is unwavering is our diligence,” said Otero. “They have to sign the contract before we ship the products. It is a way to police and control any diversion that is going on.”

P&G also runs a program that includes coding and tracking products. “We can see the original recipient by a product’s coding. Then we can use the contract to take legal action. We have severed relationships with many customers that were in our network. The bulk [of diversion we discovered] was coming from three distributors, two in the U.S. and one in Canada.” Since the crackdown, P&G said it has seen sales of its professional products in retail channels decrease. According to AC Nielsen data, sales of P&G professional products in retail channels fell 15 percent in the most recent 52 weeks, ended April 12.

Other manufacturers, he said, claim to be committed but “sometimes turn a blind eye.” Recently, in part for its diversion efforts, as well as to recognize its service and partnership, 350 Regis banner salons switched to carrying Wella haircolor.

Mike Nave is the publisher of the Beauty Industry Report, the executive newsletter serving the salon industry. For free trial issue, send your contact information, including your email address, to mike@bironline.com.