Introduction

Sally Beauty is the world’s largest distributor and retailer of beauty products based on a store count of more than three, seven hundred shops in 12 international locations.

Sally Beauty stores perform throughout America and Puerto Rico, Canada, Mexico, Peru, the United Kingdom, Belgium, Chile, France, Ireland, the Netherlands, Spain and Germany.

 

Through its Sally Beauty Supply and Beauty Systems Group companies, the company sells and distributes through over 6,000 shops, which include approximately two hundred franchised units.

 

Sally Beauty Supply has over 3,500 stores that offer more than 10,000 products for hair, skin and nails through expert lines together with Clairol, L’Oreal, Wella and Conair, in addition to an in-depth choice of proprietary products.

 

Management Wants To Transform The Company

 

Like many outlets, Sally Beauty is dealing with accelerated pressure from its competition. Ulta Beauty, Sephora and new entrants like Glossier are regularly referred to as competitors of Sally Beauty supply, however Amazon, Walmart, CVS and Walgreens are its actual competitors.

 

This year has come to be one in all transitions for Beauty, starting with a value discount plan to fund long-time period boom projects. The application includes value-financial savings initiatives focused on organizational efficiencies along with headcount discounts at the corporation’s headquarters in Denton, Texas.

 

Additional tasks encompass progressed sourcing of product and brands for resale, oblique procurement, lowering shop running fees and enhancing inventory control to better serve customers and decrease working capital.

 

The projects mirror the ongoing awareness of Sally Beauty Supply on streamlining operations and improving efficiencies on the way to drive a lengthy-time-period worthwhile boom.

 

Savings executed from the initiatives are expected to be reinvested into market-competitive keep wages; the acceleration of generation investments so that it will improve the in-shop enjoyment, accelerate e-commerce boom and provide better visibility to shop-level inventory.

 

Additional projects will toughen the Sally Beauty supply commercial enterprise in the U.S. And Canada by using growing awareness on its middle hair coloration and hair care classes.

 

These cost discount initiatives and reinvestment plans are all part of Sally Beauty’s strategic plan designed to generate a profitable boom. In a recent announcement, it articulated its approach:

Sally Beauty Has The Right Strategy?

 

A question that has to be answered is this: Does Sally Beauty Supply have the right method? I’m not convinced that it does.

 

The comments from Brickman convince me that the focal point of executives at Sally Beauty are too narrow and do not safely expect the adjustments inside the splendor class so one can be driven with the aid of Amazon and different competitors.

 

I recognize the preference on the part of Brickman to put money into strategic projects to accelerate increase in hair colour and care for the reason that these categories generate over 50% of sales.

 

The hazard, however, is that greater revolutionary competitors with faster growing sales and logo loyalty can slowly and then abruptly reduce Sally Beauty’s marketplace percentage in these identical classes.

 

For example, eSalon  and Madison Reed offer clients with awesome hair color and hair care products through an internet model—a version growing in popularity and that will become tons more regular. 

 

Another instance is Amazon. With the discharge of its non-public-label synthetic motor oil, Amazon is efficiently taking marketplace proportion from leaders within the category. Executives at oil companies I spoke with even as I was writing my article on Amazon’s access into motor oil all made a comparable remark to me: “We notion our commercial enterprise turned into too technical for Amazon.” 

 

Amazon is having the identical effect with the discharge of its foam bed that competes with Casper, Leesa and other main bed outlets. There are many examples of ways powerful Amazon’s personal-label merchandise have emerged.

 

Amazon can without difficulty take marketplace percentage from Sally Beauty supply because its contemporary enterprise version is so effortlessly copied and disrupted. This isn’t always to suggest Sally Beauty must run from Amazon. Just the opposite.