Sally Beauty Supply 2011 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2011 Sally Beauty Supply annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

The following table sets forth the approximate percentage of BSG sales attributable by distribution
channel:
Fiscal Year Ended
September 30,
2011 2010
Company-operated retail stores ....................... 62.9% 61.5%
Professional distributor sales consultants (full-service) ....... 27.4% 27.8%
Franchise stores .................................. 9.7% 10.7%
Total ......................................... 100.0% 100.0%
Merchandise
BSG stores carry a broad selection of third-party branded products, ranging between 5,000 and 10,000
SKUs of beauty products, including hair color and care, skin and nail care, beauty sundries and electrical
appliances and other beauty items. Some products are available in bulk packaging for higher volume salon
needs. Through BSG’s information systems, each store’s product performance is actively monitored,
allowing maintenance of an optimal merchandise mix. Additionally, BSG’s information systems track and
automatically replenish inventory levels on a weekly basis, enabling BSG to maintain high levels of product
in stock. Although BSG positions itself to be competitive on price, its primary focus is to provide a
comprehensive selection of branded products to the salon professional. Certain BSG products are sold
under exclusive arrangements with suppliers, whereby BSG is designated the sole distributor for a specific
brand name within certain geographic territories. We believe that carrying a broad selection of branded
merchandise is critical to maintaining relationships with our professional customers.
The following table sets forth the approximate percentage of BSG’s sales attributable by merchandise
category:
Fiscal Year Ended
September 30,
2011 2010 2009
Hair care ...................................... 37.0% 37.1% 38.5%
Hair color ...................................... 29.6% 29.6% 28.4%
Promotional items(a) .............................. 12.9% 13.2% 12.5%
Skin and nail care ................................ 9.7% 8.1% 7.7%
Electrical appliances .............................. 4.3% 4.5% 4.9%
Other beauty items ............................... 6.5% 7.5% 8.0%
Total ........................................ 100.0% 100.0% 100.0%
(a) Promotional items consist of sales from other categories that are sold on a value-priced basis.
Marketing and Advertising
BSG’s marketing program is designed primarily to promote its extensive selection of brand name products
at competitive prices. BSG distributes at its stores and mails to its salon and salon professional customers,
multi-page color shopping guides that highlight promotional products. In addition, BSG communicates
with its customers and distributes promotional material via e-mail, Facebook and Twitter. Some BSG
stores also host monthly manufacturer-sponsored classes for customers. These classes are held at BSG
stores and led by manufacturer-employed educators. Salon professionals, after paying a small fee to attend,
are educated on new products and beauty trends. We believe these classes increase brand awareness and
potentially drive sales in BSG stores.
10