Tag: skin care

Radiance Holdings, Owner of Sola Salons, Bought by TSG

~ Joseph Kellner

Private equity firm TSG Consumer Partners (“TSG”) has announced the acquisition of a majority stake in Radiance Holdings, a high-growth platform representing a collection of premier brands in the beauty, wellness, and self-care sectors. As part of the transaction, Radiance Holdings’ management team will continue to lead the company. Financial terms of the transaction were not disclosed.

The company, based in Denver, Colo., is committed to investing in its brands, driving innovation, and helping their franchisees and community of independent beauty professionals grow their businesses and improve their lives. Radiance Holdings’ current portfolio is approximately 85 percent franchised and includes the following brands:

  • Sola Salons: Founded in 2004, Sola Salons is the world’s largest and fastest growing salon studios franchise with approximately 650 locations across the U.S. and Canada as of December 2022. Sola Salons rents premium suites to individual beauty care professionals, providing them with more autonomy and better economics than traditional salons.
  • Woodhouse Spas: Founded in 2001, Woodhouse Spas is the largest premium day spa brand in the U.S. with approximately 80 locations across the U.S. as of December 2022. Woodhouse Spas feature a multi-modality platform, anchored by massage and skincare, which brings resort-level quality to convenient neighborhood locations.

“TSG has an impressive track record of building and scaling world-class beauty and franchising brands, and we are thrilled to work with them,” said Christina Russell, CEO of Radiance Holdings. “We couldn’t be more excited to leverage TSG’s resources and expertise as we look to expand our platform and enhance our value proposition for franchisees, beauty care professionals, and consumers across our portfolio. As we build on our momentum and the powerful growth opportunities ahead, it’s critical that we collaborate with a partner that understands our business and has been down a similar road many times with brands that we admire.”

“Radiance Holding is empowering a new generation of beauty professionals seeking to work independently and offer their clientele more control over their salon experience, a trend accelerated by the pandemic,” said Michael Layman, managing director at TSG. “Their portfolio of differentiated brands are exceeding consumer expectations and are well positioned for further growth.”

Pierre LeComte, managing director at TSG, said, “We look forward to partnering with Christina and the management team to continue scaling their national platform in beauty and personal care through a variety of initiatives, including thoughtful digital marketing efforts developed in collaboration with TSG’s Digital Team, accelerated franchise development, strategic acquisitions, and service line extensions.”

Clean Beauty…or Dirty Business?

~ Joseph Kellner

The “clean” beauty movement is picking up steam. Health-conscious consumers are paying more attention to ingredients applied to their bodies and are looking for products made without harmful chemicals. In response to the demand, some popular cosmetics companies are now offering so-called, “clean” beauty lines. Companies considering joining this trend should take into account the substantial legal risks.

A look at the food industry’s use of the adjectives like “natural”, “clean”, “simple,” and “wholesome” illustrates the kinds of risks the beauty industry may face. When consumers began paying more attention to ingredients, companies began marketing their products with these health driven adjectives. However, this led to a barrage of class action lawsuits for false advertising under state consumer protection laws as plaintiffs lawyers argued that the claims made on the front of the label did not match the ingredients on the back of the label.

The food industry started to use the word “clean” after the use of “natural” resulted in a barrage of consumer lawsuits. As it turned out, however, the alternative claim also resulted in consumer class action lawsuits. The theory behind these suits is that “clean” is just a synonym of “all-natural” and signifies to consumers the absence of any synthetic chemicals. Similarly, it is argued that “wholesome” and “simple” are misleading consumers as to the real nutritional value of food products. This is at best an idiosyncratic view, not backed by legitimate consumer evidence. However, merely making the allegation is sometimes sufficient to survive a motion to dismiss, where the court must consider whether “no reasonable consumer” could share the plaintiff’s alleged interpretation.

Adding to the complexity is the difficulty of placing a sufficiently prominent and clear explanation, or definition, for such adjectives in an unavoidable location where the plaintiff cannot reasonably allege she failed to notice it. Courts have sometimes held that consumers need not be expected to turn around the bottle or package to read textual information on the back label before purchase.

We have seen false advertising claims creeping into the skincare industry as well, and this, coupled with the history of the food industry, should put the beauty industry on notice of the legal risks. For example, just last month, a lawsuit was filed in California State Court against the makers of Coppertone sunscreen. Prescott, et al. v. Bayer Healthcare Pharmaceuticals Inc., et al., No. 5:20-cv-00102 (N.D. Cal. filed Jan. 3, 2020). The suit alleges that Coppertone deceived consumers by labeling certain sunscreens as “mineral-based” when in fact chemicals make up a significant portion of its active ingredients. The plaintiff’s theory is that the headline “mineral-based” claim suggests to consumers that the product protects skin from sun damage exclusively with minerals.

In the “all-or-nothing” world of the plaintiffs’ lawyers, any ingredient call-out or characterization creates legal peril by negative implication. If the label says “clean,” the product can contain no synthetic substances. If the label says “plant-based,” the product should not have any synthetic or animal components – even if trivial in amount. Plaintiffs are routinely sending products to labs for rote chromatographic analysis, and the tiniest detectable amounts of disfavored chemicals can trigger lawsuits. In California, the consumer protection laws include California’s Unfair Competition Law, False Advertising law, and the Consumer Remedies Act. Companies making sales in California also need to be mindful of Proposition 65 which requires warning labels on products that contain any enumerated chemicals identified by the State to cause cancer, birth defects, or reproductive harm.

Since there are no regulations mandating the definition of such descriptive terms on cosmetic labels, these definitions (e.g., “clean”) can vary from company to company. The beauty industry should heed caution when using “clean” beauty claims. In order to avoid consumer confusion— and ultimately litigation— companies should define “clean” in a way that they can, and do, meet, and that definition should be available at the point of sale.

Last chance to claim your money!!!

~ Joseph Kellner

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Organix Shampoo Maker Agrees to $6.5M Class Action Settlement Get Your Money!!!!

The maker of Organix skin and hair care products has agreed to pay $6.5 million to settle a class action lawsuit over claims that it falsely labeled its products as organic. The Organix class action settlement was filed in California federal court on August 22 and resolves all claims related to its allegedly deceptive marketing and advertising practices.

Under the terms of the Organix settlement, defendant Vogue International will pay $6.5 million into a fund set aside to compensate consumers who purchased Organix products. Class Members who submit valid claims are eligible to receive $4 for each Organix product they purchased, up to a maximum of $28. The class action settlement will also prohibit Vogue from manufacturing skin and hair care products under the Organix brand. The company also agreed to stop using the term “organic” on a product label unless at least 70 percent of its ingredients are organically produced.

The Organix class action lawsuit was initially filed by Andrea Golloher, Roberta Chase, Michael Shapiro and Brenda Brown in Alameda County Superior Court in 2012. In November, Vogue removed the case to California federal court. Vogue moved to dismiss the class action lawsuit, arguing that the plaintiffs lacked standing to bring breach of warranty claims in Florida, New Jersey, Ohio and Texas because they had not purchased Organix products in those states. They agreed to settle the lawsuit before the judge ruled on their motion to dismiss, although Vogue continues to deny that its marketing and advertising was false or misleading.

In an amended version of the class action lawsuit, the plaintiffs claimed that the name “Organix” was misleading, and that the products contained only 10 percent organic ingredients. They allege that they would not have paid the higher price for the products had they known that they were not truly organic. When making the decision to buy the hair and skin care products, they relied on the front and back labels, which stated that the products contained organic ingredients.

The Organix class action settlement was reached after an all-day mediation session with Randall W. Wulff, a highly-respected mediator in Oakland, California. Organix products typically sell for $7.99, but Vogue often offers the products at a “buy one get one free” discount. In the class action settlement, the parties agreed that a reimbursement of $4 per product was fair. They also agreed that future purchasers of the Organix product line would be protected by the injunction preventing Vogue from making misleading statements about organic ingredients in its products.

Under the terms of the Organix settlement, Class Members include “all individuals in the United States who purchased at least one of Vogue’s Organix brand hair care and/or skin care products from October 25, 2008 to the date notice to the Class is first published.”.

If you purchased Organix hair care and skin care products at any time between October 25, 2008, and October 10, 2013, you may be eligible to claim up to $28 cash from the class action settlement. Eligible Organix products include but are not limited to Organix Coconut Milk, Organix Macadamia Oil, Organix Cocoa Butter, Oganix Brazilian Keratin Therapy, Organix Moroccan Argan Oil, and more.

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Claim Forms can be submitted online at www.HairCareSettlement.com or mailed to the Settlement Administrator at the following address:

Organix Class Settlement Claims Administrator Heffler Claims Group P.O. Box 59029 Philadelphia, PA 19102

 

For the entrepreneur the beauty industry is good news!

~ Joseph Kellner

THE REAL HAIR TRUTH

Beauty Industry in 2013 at a Glance

Comprised of a diverse yet interrelated set of business lines, the beauty industry helps us look and smell our best. Before we leave the house each day, we have likely undergone our personalized beautification ritual. Included in this ritual is the daily shower and shave, the weekly nail trim, and the monthly haircut. And increasingly we are taking a more holistic view of our health, and our beautification ritual may now include a periodic massage and trip to the spa. But our concern with our appearance is hardly anything new; indeed the beauty industry has been expanding and growing for all of recorded history. For the interested entrepreneur this continuing growth and evolution offers a diverse menu of opportunity.

The beauty industry today encompasses far more than cosmetics and skin care products, though they are still a significant portion of the sector. A wide range of services and products are available to help us put our best face forward, and the beauty industry now also encompasses hair styling and hair removal, nail and tanning salons,massage parlors, shower and shaving products, perfumes, colognes and more. Many people now treat their beauty ritual as an escape from the hustle of the information age, whether its a few minutes spoiling oneself with a high-end product or a full day at a luxury spa.

Lotions, Treatments and Baths. Oh my!

Beauty industry opportunities can be broadly separated between products and services, though many providers offer both. Within both products and services, however, exist a wide range of business models based on target market, production processes and location.

From exfoliating soaps and volumizing shampoos to anti-wrinkle creams, the beauty industry provides us with choices galore to keep us looking younger and healthier. Cosmetics exist for every style and taste, as well as every skin tone, texture and even allergy. Rows of toothpaste stretch off into the distance at the local retail outlet, and it is no longer a choice only of brand, but between whitening, tartar protection, flavor, packaging styles and more! And a similar story is told in the aisles for perfume, deodorant and hair coloring. Certain businesses also distinguish themselves through manufacturing processes such as using all natural ingredients or a refusal to use animal testing on products.

While the diversity among service providers is not quite as extensive, there is considerable differentiation between offerings based on price, location and target markets. Some businesses target the inexpensive, fast hair cut market while others focus on providing a luxury spa experience. Franchise opportunities exist for hair salons, skin treatments, nail care, and tanning. Niche providers offer products and services focused on children, weddings,  and fashion, among others.

Different Beauty Franchise Opportunities

Hair Care Stylists, salons, shampoos/conditioners, coloring product, styling product (gels, sprays, etc)
Cosmetics & Skin care Make-up, moisturizing lotions, tanning salons, sun care products
Fragrance Perfumes, body sprays, cologne, deodorants
Miscellaneous Nail polish, shaving products, massage parlors, hair removal services

Beauty Industry Trends

Such diversity and innovation exists because we demand it. The beauty industry continues to expand globally, with some projections claiming 8.5% growth by 2014; revenue growth in 2010 is estimated at 3.3%. Several trends support this expansion and promise continued profitability into the future.

Globally, rising per capita incomes and greater access to international markets are increasing spending on discretionary items such as perfumes and cosmetics. Though the recent economic turmoil had decreased spending on some discretionary products in the United States, purchasing of beauty products has remained strong. Consumers did tend to be more price-conscious however, with over 70% of survey respondents claiming to give mass market products more consideration over high-end products during the downturn.

Perhaps not as surprising as it once was, one of the fastest growing segments of the beauty industry is products and services aimed at men. Traditionally focused on female consumers, men today are gaining increasing attention from the beauty industry. Of course most of us have been using deodorant and toothpaste for several months already, but increasingly men are being targeted for body sprays, specialty hair products, lotions and even nail care. Salons offer a menu of pampering services for men, including cuts and shaves, facials, massages and manicures.

Consumers of beauty industry products tend to be brand loyal, and share what works for them with their friends. 58% of those surveyed claimed that personal recommendations weigh more heavily than celebrity marketing, and only 44% bought a particular product for its claim of specific product attributes. Like many things, beauty products gain a level of familiarity and comfort for the consumer, and switching to a new product often takes some extra incentive. Popular and successful marketing campaigns in the beauty industry often include a free sample and discounts for referrals to lure new customers in, and loyalty programs to keep them.

Beauty Industry Franchise Opportunities

From product innovation, organic industry growth and continued growth into the male half of the population, the beauty industry continues to offer a diverse set of profitable franchising opportunities. Beauty franchises exist across the space with dozens of strategies reaching all types of consumer.

Retail opportunities include brick-and-mortar store locations as well as home-based businesses, and span across cosmetics, skin care, hair care, tanning and more. Frequently producers of beauty industry products will have a franchising distribution system, or even have training locations for service providers. Cosmetic and skin care entrepreneurs offer specialized services such as nail care and tanning, a complete menu designed for the full day experience and everything in between. Some salons offer an exclusive membership experience and others specialize on walk-in business.

Hair care opportunities exist for barbers and stylists alike, with a range of different franchises available based on cost, location, and gender. Many male-focused franchises offering everything from the basic barbershop have been springing up to complement the traditionally female-focused salon offerings. Franchise chains devoted to children offer a more entertaining environment for kids. There are also businesses focused on hair removal and coloring.

splish-franchise-opportunities

Eco-friendly salons such as the Splish franchise offer hair care in an environmentally conscious environment.

As we can see, the beauty industry encompasses a wide range of products and services, and franchising plays a major part in bringing them to the consumer. As the industry continues to grow and evolve, profitable opportunities will abound…the hard part is choosing which one!