Sally Beauty Supply 2011 Annual Report Download - page 18

63% and 64%; and BSG accounted for approximately 38%, 37% and 36% of the Company’s consolidated
net sales for the years ended September 30, 2011, 2010 and 2009, respectively.
Financial information about business segments and geographic area information is incorporated herein by
reference to the ‘‘Business Segments and Geographic Area Information,’’ Note 20 of the ‘‘Notes to
Consolidated Financial Statements’’ in ‘‘Item 8—Financial Statements and Supplementary Data’’
contained elsewhere in this Annual Report.
Neither the sales nor the product assortment for Sally Beauty Supply or BSG are generally seasonal in
nature.
Sally Beauty Supply
We believe Sally Beauty Supply is the largest open-line distributor of professional beauty supplies in the
U.S. based on store count. As of September 30, 2011, Sally Beauty Supply operated 3,133 company-
operated retail stores, 2,509 of which are located in the U.S., with the remaining 624 company-operated
stores located in Puerto Rico, Canada, Mexico, Chile, the United Kingdom, Ireland, Belgium, France,
Germany and Spain. Sally Beauty Supply also supplied 25 franchised stores located outside the U.S. Our
Sally Beauty Supply stores carry an extensive selection of professional beauty supplies for both retail
customers and salon professionals, with between 5,000 and 8,000 stock keeping units, or SKUs, (in the U.S.
and Canada) of beauty products across product categories including hair color, hair care, skin and nail
care, beauty sundries and electrical appliances. Sally Beauty Supply stores carry leading third-party brands
such as Clairol↧, Revlon↧ and Conair↧, as well as an extensive selection of exclusive-label merchandise.
Store formats, including average size and product selection, for Sally Beauty Supply outside the U.S. and
Canada vary by marketplace. We believe that Sally Beauty Supply has differentiated itself from its
competitors through its customer value proposition, attractive pricing, extensive selection of leading third-
party branded and exclusive-label products, a broad ethnic product selection, knowledgeable sales
associates and convenient store locations.
Store Design and Operations
Sally Beauty Supply stores are designed to create an appealing shopping environment that embraces the
retail consumer and salon professional and highlights its extensive product offering. Sally Beauty Supply’s
U.S. and Canadian stores average approximately 1,700 square feet in size and are located primarily in strip
shopping centers. Generally, Sally Beauty Supply stores in the U.S. and Canada follow a consistent format,
allowing customers familiarity between Sally Beauty Supply locations. Store formats for Sally Beauty
Supply outside the U.S. and Canada vary by marketplace.
Sally Beauty Supply stores are segmented into distinctive areas arranged by product type with signs
allowing its customers to easily navigate through its stores. Sally Beauty Supply seeks to stimulate cross-
selling and impulse buying through strategic product placement and use of displays to highlight new
products and key promotional items.
Merchandise
Sally Beauty Supply stores carry a broad selection of branded and exclusive-label professional beauty
supplies. Sally Beauty Supply manages each category by product and by SKU and uses centrally developed
planoguides to maintain a consistent merchandise presentation across its store base (primarily in the U.S.
and Canada). Through its information systems, Sally Beauty Supply actively monitors each store’s
performance by category, allowing it to maintain consistently high levels of in-stock merchandise. We
believe Sally Beauty Supply’s tailored merchandise strategy enables it to meet local demands and helps
drive traffic in its stores. Additionally, its information systems enable it to track and automatically
replenish inventory levels, generally on a weekly basis, primarily in the U.S.
6