Supercuts 2009 Annual Report Download - page 45

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Table of Contents
Product Revenues. Product revenues are primarily sales at company-owned salons, hair restoration centers, and sales of product and
equipment to franchisees. Consolidated product revenues were as follows:
The growth in product revenues during fiscal year 2009 was primarily due to product sales of $32.2 million to the purchaser of Trade
Secret, partially offset by same-store product sales decreasing 5.1 percent. Same-store product sales decreased 5.1 percent during the fiscal year
2009 due to a decline in customer visits and a change in product mix, as a larger percentage of product sales came from promotional items.
The growth in product revenues during fiscal year 2008 was primarily due to acquisitions, offset by same-store product sales decrease of
0.8 percent during the twelve months ended June 30, 2008. This decrease is due to the recent decline in the global economic condition and the
continued trend of product diversion and increased appeal of mass hair care lines by the consumer.
The growth in product revenues during fiscal year 2007 was primarily due to acquisitions. Growth was not as robust compared to the prior
fiscal year due to a same-store product sales increase of 0.2 percent during the twelve months ended June 30, 2007, related to product diversion,
reduced promotions and increased appeal of mass retail hair care lines by the consumer.
Royalties and Fees. Consolidated franchise revenues, which include royalties and franchise fees, were as follows:
Total franchise locations open at June 30, 2009 and 2008 were 2,078 (including 33 franchise hair restoration centers) and 2,134 (including
35 franchise hair restoration centers). The decrease in consolidated franchise revenues during fiscal year 2009 was primarily due to the merger of
the 1,587 European franchise salon operations with Franck Provost Salon Group on January 31, 2008.
Total franchise locations open at June 30, 2008 and 2007 were 2,134 (including 35 franchise hair restoration centers) and 3,764 (including
41 franchise hair restoration centers). The decrease in consolidated franchise revenues during fiscal year 2008 was primarily due to the merger of
the 1,587 European franchise salon operations with Franck Provost Salon Group on January 31, 2008. The decrease in consolidated franchise
revenues during fiscal year 2008 was partially offset due to the weakening of the United States dollar against the Canadian dollar, British pound
and Euro as compared to the exchange rates for fiscal year 2007.
Total franchise locations open at June 30, 2007 and 2006 were 3,764 (including 41 franchise hair restoration centers) and 3,797 (including
42 franchise hair restoration centers). We purchased 97 of our franchise salons during the twelve months ended June 30, 2007 compared to 137
during the twelve
43
Increase Over Prior
Fiscal Year
Years Ended June 30,
Revenues
Dollar
Percentage
(Dollars in thousands)
2009
$
556,205
$
4,919
0.9
%
2008
551,286
22,374
4.2
2007
528,912
42,661
8.8
Increase (Decrease)
Over Prior
Fiscal Year
Years Ended June 30,
Revenues
Dollar
Percentage
(Dollars in thousands)
2009
$
39,624
$
(27,991
)
(41.4
)%
2008
67,615
(12,331
)
(15.4
)
2007
79,946
2,706
3.5