Sally Beauty Supply 2011 Annual Report Download - page 20

Marketing and Advertising
Sally Beauty Supply’s marketing program is designed to promote its extensive selection of brand name
products at competitive prices. The program is currently centered on multi-page, color flyers highlighting
promotional products. Separate flyers are created and tailored to Sally Beauty Supply’s retail customers
and salon professionals. These flyers, which are available in Sally Beauty Supply stores, are also mailed to
loyalty program customers and salon professionals on a monthly basis and are supplemented by e-mail
newsletters.
We continuously adapt our marketing and merchandising initiatives for Sally Beauty Supply in an effort to
expand our market reach or to respond to changing consumer preferences.
Sally Beauty Supply’s customer loyalty and marketing programs, primarily in the U.S. and Canada, allow
Sally Beauty Supply to collect point-of-sale customer data and increase our understanding of customers’
needs. The Sally ‘‘Beauty Club’’ is a loyalty program for customers who are not salon professionals. Beauty
Club members, after paying a nominal annual fee, are eligible to receive a special, discounted price on
almost every non-sale item. Members are also eligible to receive special Beauty Club e-mail newsletters
and exclusive direct mail flyers that contain additional savings, beauty tips, new product information and
coupons. In addition, the ‘‘ProCard’’ is a marketing program for licensed salon professionals. ProCard
members are eligible to receive discounts on all beauty products sold at Sally Beauty Supply stores. We
believe these programs are effective in developing and maintaining customer relationships. Outside the
U.S. and Canada, our customer loyalty and marketing programs vary by marketplace.
Store Locations
Sally Beauty Supply selects geographic areas and store sites on the basis of demographic information, the
quality and nature of neighboring tenants, store visibility and location accessibility. Sally Beauty Supply
seeks to locate stores primarily in strip malls, which are occupied by other high traffic retailers including
grocery stores, mass merchants and home centers.
Sally Beauty Supply balances its store expansion between new and existing marketplaces. In its existing
marketplaces, Sally Beauty Supply adds stores as necessary to provide additional coverage. In new
marketplaces, Sally Beauty Supply generally seeks to expand in geographically contiguous areas to leverage
its experience. We believe that Sally Beauty Supply’s knowledge of local marketplaces is an important part
of its success.
The following table provides a history of Sally Beauty Supply’s store count (including franchised stores)
during the last five fiscal years:
Fiscal Year Ended September 30,
2011 2010 2009 2008 2007
Stores open at beginning of period ........ 3,032 2,923 2,844 2,694 2,511
Net store openings during period .......... 126 108 60 110 83
Stores acquired during period ............ — 1 19 40 100
Stores open at end of period ............. 3,158 3,032 2,923 2,844 2,694
Beauty Systems Group
We believe that BSG is the largest full-service distributor of professional beauty supplies in North
America, exclusively targeting salons and salon professionals. As of September 30, 2011, BSG had 995
company-operated stores, supplied 156 franchised stores and had a sales force of approximately 1,116
professional distributor sales consultants selling exclusively to salons and salon professionals in all states in
the U.S., in portions of Canada, and in Puerto Rico, Mexico and certain European countries. BSG carries
8