Under the leadership of Karl-Heinz Pitsch, who became president and chief executive officer in April, Sexy Hair Concepts has cut the number of lines under the Chatsworth, Calif.-based company’s umbrella from 11 to seven, and eliminated consumer advertising to concentrate on reaching out to hairstylists. The goal is to build each of the remaining lines into $10 million-plus businesses and raise brand awareness in salons.
“The opportunity in this environment is to refocus and see what the company is all about,” said Pitsch, who started at Sexy Hair as chief operating officer after it was acquired last year by private equity firm Thoma Bravo. “To a huge extent, the 35 percent reduction of our sku’s makes it easier for our distribution partners to support what really matters for us. Instead of launching new subbrands, we are launching individually strong products within the seven subbrands to keep them fresh and exciting all the time.”
The latest strategic initiatives aren’t driven by poor sales. In fact, Pitsch underscored that Sexy Hair is outperforming the industry and has tallied around 3 percent year-over-year growth while he said the professional hair care as a whole dipped roughly 10 percent. He also noted Sexy Hair became the number-one professional hair spray brand in North America last year.
“Within the professional beauty business, we are very conveniently priced,” Pitsch said, offering a rationale for Sexy Hair’s persistent strength. “We have been very aggressive with our promotional activities to help support salons.” He pointed out that packaging together two Sexy Hair products for less than $20 has been a successful promotion, and that Sexy Hair shampoos retail for $11.95, lower than many competitors’ shampoos, which regularly top $20.
Still, Pitsch has ambitious plans for the near future. By the end of next year, he projected Sexy Hair’s revenues should grow 10 percent and its international presence should greatly expand. The company entered seven countries outside the U.S. this year and expects to enter three more next year. International sales constitute about 10 percent of Sexy Hair’s total, and Pitsch’s objective is to raise that amount to 30 percent.
“All our subbrands, not in a year from now, but a year after [that,] they should do $10 million in sales each to be relevant,” he said. “Otherwise, we will discontinue them.”
Healthy Sexy Hair, Sexy Hair’s color-safe line for all hair types, has been reformulated and repackaged, and the revamped products are hitting shelves in January. Cocoa has been put in the formula, which has retained soy as a key ingredient, and most bottles have been changed to cylinders to unify Sexy Hair’s look across various lines. Two products — Soy Tri-Wheat Treatment, priced at $15.95 for 6.8 oz., and Soy Mellow Conditioning Taming Foam priced at $16.95 for 6.8 oz. — are joining the Healthy Sexy Hair lineup to push it to nine items.
Pitsch believes Healthy Sexy Hair can become a $10 million franchise for Sexy Hair in 18 months. “This company is already well represented in the styling market. We are not as strong in the care, shampoo-conditioner market,” he said. “We want to increase our footprint in the back-bar side of the salon.”
Don’t expect a celebrity to be the face of Healthy Sexy Hair anytime soon. Sexy Hair has moved away from the celebrity-centered advertising that has been its calling card in recent years. (Kellie Pickler and Katharine McPhee have been Sexy Hair celebrity spokeswomen.) Instead, Pitsch said the company is swelling its sampling program fivefold and sending its 150 freelance educators on the road. A 40-city tour full of “meet the artist” events is scheduled for next year.
“What we will do next year is double our investment in education,” said Pitsch. “Professional hair care is driven through the recommendations of stylists. We want to reintroduce the brand to a broader audience of stylists.”
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