Sally Beauty Supply 2007 Annual Report Download - page 12
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promotions and monthly flyers. We believe our customers perceive these exclusive label products to be comparable in quality and name recognition to leading
third-party branded products.
The following table sets forth the approximate percentage of Sally Beauty Supply's sales by merchandise category:
Year Ended
September 30, 2007
Hair color 21.3%
Skin and nail care 17.8%
Hair care 17.6%
Brushes, cutlery and accessories 14.1%
Electrical appliances 13.8%
Ethnic products 9.8%
Other beauty items 5.6%
Total 100.0%
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. Additionally, a Sally Beauty magazine that provides customers with beauty trends and product
information is sold in Sally Beauty Supply stores.
Sally Beauty Supply's customer loyalty and marketing programs 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, receive a special, discounted price on almost every non-sale item. Members are also eligible for a special Beauty Club e-mail
newsletter that contains additional savings, beauty tips, new product information and coupons. In addition, the "ProCard" is a marketing program for salon
professionals. ProCard members receive discounts on all beauty products sold at Sally Beauty Supply stores. We believe these programs are effective in
developing and maintaining customer relationships.
Store Locations
Sally Beauty Supply selects geographic markets and store sites on the basis of demographic information, 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 markets. In its existing markets, Sally Beauty Supply adds stores as necessary to
provide additional coverage. In new markets, 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 markets is an important part of its success.
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Source: Sally Beauty Holding, 10-K, November 29, 2007