Industry Groups Battle Over Midwest Trade Shows

by CurlStylist on Wednesday, April 7th, 2010

Two large industry groups have issued dueling statements in regard to the Professional Beauty Association’s recent announcement that it will launch a major trade show in a Chicago suburb next year, two weeks after Cosmetologists Chicago (CC) holds its big America’s Beauty Show, another major show.

At ABS this year, held shortly after PBA’s startling announcement, many industry insiders expressed shock and surprise at the timing and location of the newly announced show. One noted executive said, “It was like they dropped a bomb.”

“When one seeks change or improvement, it is rarely the heavy handed wielding of a big stick that supports progress,” the executive (who declined to be named) said. “It is a sad day for our industry that such a tactic was used to in an attempt to force change in the show arena in Chicago, whether the change was needed or not.”

Many wonder if the industry, and the midwest, can support two large shows so close together, and what the ramifications for both shows will be. Will manufacturers be able put on their often-lavish productions at two shows so close together, many wonder? Will one show outshine the other? Will one show be forced to cease to be?

We’ll find out eventually, of course, but some industry insiders have thoughts on the matter.

“It’s totally f’ed up,” said an industry veteran, who also asked not to be named. “When you look at the overall picture and how fragmented the industry is and all the acquisitions that have taken place and the dollars and cents, the last thing this industry needs is more fragmentation. ABS (formerly the Midwest Beauty Show) has played the strongest role in the Midwest, and has been nothing but a success. For someone to come and disrupt this for unknown reasons is the worst thing that can happen to the hairdresser in the Midwest.”

Longtime beauty industry publicist Janice McCafferty has a different take on the changes: “Chicago and the Midwest is a huge market for the beauty industry. I feel our profession can handle another show in order to better serve us. Plus, competition never hurts. Maybe in the end we will wind up with the best show in the country serving our industry in the way it should be.”

PBA’s statement indicated, “It is PBA’s desire to work with Cosmetologists Chicago . . . in order to create an event providing increased value for exhibitors and attendees, expanded education, and the opportunity for a more unified industry. PBA is not trying to undermine the ABS show and believes by working with ISSE - Midwest, Cosmetologists Chicago can actually benefit more from this new relationship versus their current situation.

CC responds, “PBA has never provided us with any formal business plan for a relationship between the two groups, or how CC could benefit from such an arrangement. At the only formal meeting between PBA and CC’s management about this issue—which occurred on March 15, just one week before the opening of ABS 2010—PBA failed to provide any explanation as to what benefit CC, its members, or ABS exhibitors would receive in return for CC’s sharing its years of brand equity with PBA.”

PBA also states, “ISSE - Midwest was created in response to a desire from members for an alternative event in the Chicago market. PBA had no intention of engaging in predatory practices, but rather answered the call from members and non-members alike who desired a show with substantially less cost involved, that was located at the popular Donald E. Stephens Convention Center in Rosemont, Illinois, and that could deliver the professionalism that exhibitors and attendees have come to expect at ISSE - Long Beach and Cosmoprof North America. As an example, PBA’s offer to cover drayage will provide substantial cost savings to exhibitors, which would ideally be passed along to show attendees.”

CC’s response: “Exhibit space rates for ABS 2011 will be the same as for ABS 2010. In most cases, these rates are actually lower than listed rates in PBA’s exhibitor application. We also note that CC does not require exhibitors to become “members” in order to lease space at the ABS. Some materials that PBA has distributed indicate that exhibitors must become PBA members in order to obtain exhibit space.”

We look forward to seeing how this situation plays out, and will keep you posted as we find out more information. If you have thoughts, please post them below in the comments area. We’d love to know what you think.

Salon Outlook Positive in Q3

by Michelle Breyer on Thursday, October 29th, 2009

The outlook for the salon/spa industry remained positive in the third quarter, as the Professional Beauty Association’s (PBA) Salon/Spa Performance Index (SSPI) rose for the second consecutive quarter. The SSPI — a quarterly composite index that tracks the health of and outlook for the U.S. salon/spa industry — stood at 101.9 in the third quarter, up 0.1 percent from its second-quarter level. The SSPI is constructed so that the health of the salon/spa industry is measured in relation to a steady state level of 100. Index values above 100 indicate that key industry indicators are in a period of expansion, while index values below 100 represent a period of contraction for key industry indicators.

“For the first time this year, salon/spa owners reported a net increase in service sales. However, they also reported that retail sales continue to be soft,” said Sam Leyvas, PBA’s director of government affairs. “Long term we are seeing growing optimism on the part of salon/spa owners both in terms of service and retail sales in the months ahead.

The SSPI is based on the responses to PBA’s Salon/Spa Industry Tracking Survey, which is fielded quarterly among 800 salon/spa owners nationwide on a variety of indicators including service and retail sales, customer traffic, employee/hours and capital expenditures. The Index consists of two components — the Current Situation Index and the Expectations Index.

The Current Situation Index, which measures current trends in five industry indicators (service sales, retail sales, customer traffic, employees/hours and capital expenditures), stood at 99.1 in the third quarter - down 0.6 percent from its second quarter level of 99.7. The Current Situation Index has remained below 100 throughout 2009, which represents contraction in the current situation indicators.

For the first time in 2009, salon/spa owners reported a net increase in service sales, meaning more owners reported higher sales than lower sales. Thirty-eight percent of salon/spa owners reported an increase in same-store service sales between the third quarters of 2008 and 2009, while 36 percent reported a sales decline.

Although salon/spa owners reported an improvement in service sales in the third quarter, they continued to report soft retail sales. Forty-seven percent of salon/spa owners reported lower retail sales in the third quarter while thirty-six percent of salon/spa owners reported higher retail sales between the third quarters of 2008 and 2009.

The Expectations Index, which measures salon/spa owners’ six-month outlook for five industry indicators (service sales, retail sales, employees, capital expenditures and business conditions), rose 0.7 percent in the third quarter to a level of 104.6. The Expectations Index remains well above 100, which indicates that salon/spa owners are optimistic about industry growth in the months ahead.

Third quarter growth in the Expectations Index was driven by growing optimism for both service and retail sales in the months ahead. Fully seven out of 10 salon/spa owners said they expect to have higher service sales in six months (compared to the same period in the previous year). Only 8 percent of salon/spa owners expect their service sales volume in six months to be lower than it was during the same period in the previous year.

Salon/spa owners are also much more optimistic about stronger retail sales in the months ahead. Sixty-one percent of salon/spa owners said they expect to have higher retail sales in six months (compared to the same period in the previous year. In comparison, just 9 percent expect their retail sales to decline in six months (compared to the same period in the previous year).

“PBA takes pride in providing timely and relevant economic data to the marketplace,” said Sam Leyvas “doing so is critical to our mission as the industry’s leading trade association.”

The full SSPI and second quarter Salon/Spa Tracking Survey Report can be found at www.probeauty.org.