NEW YORK — It all started with hairspray.

Carolyn Sloan had just moved from Kansas City, Mo., to Charlotte, N.C., when she needed to replace her favorite salon hairspray. When she couldn’t find a location similar to the Beauty Brands store she had frequented in Kansas City, she decided to open her own outpost of the salon and retail combination store.

“I had read that Beauty Brands was looking to franchise,” said Sloan, a lawyer by trade. Sloan formed CPS Brands and has become the first franchisee to the successful Beauty Brands concept. Sloan plans to open five more doors in the Charlotte area. Her first location will celebrate its grand opening on June 5.

With the debut of its first franchised outlet, Kansas City, Mo.-based Beauty Brands now has 26 locations, mostly in the Midwest. The combination salon and retail locales offer salon services and a wealth of salon-only brands in a store setting. Although the chain would not comment on sales, industry sources estimate that each 6,000-square-foot store has sales exceeding $3 million per year.

Numerous retailers have tried merging salon services with retail beauty products over the years with mixed success. Many retailers tinkered with salons only as a means of procuring salon merchandise. These “phantom salons” quickly perished as supplies dried up. And, Cosmetic Centers added salons too late to save the format.

Today, Bath & Body Works is adding select salon services to its store format. And, Yves Rocher executives are thinking about offering salon services once the company rolls out more U.S. doors.

Although Ulta successfully marries salons and retail, Beauty Brands is the only U.S. company to truly offer salon services and salon-only merchandise. While Ulta has a significant department stocked with salon names, the stores also carry mass market brands to round out the selection. Beauty Brands only carries salon names such as Abba, Matrix, Bibo, Murad and Nailtiques.

The selection is what made Sloan a shopper back in Kansas City. “I was afraid I’d have to call every salon in town to find my brand,” said Sloan. She said the market demographics in Charlotte are perfect for an outlet such as Beauty Brands.David Bernstein, vice president of operations for Beauty Brands, said his firm has been able to fuse salon and retail where others could not because of the costly necessity of training personnel. “One of the reasons for our success is our education. We have ongoing training that sets us apart,” Bernstein said. “Beauty Brands has succeeded because it meets the consumer demand of one-stop convenience for both high-quality products and services.”

Beauty Brands rewards loyal shoppers thanks to a program called Take 10 where shoppers can qualify for 10 percent off purchases. The company also just introduced a proprietary brand called Be All in bath and body. Like many merchants, Bernstein sees tremendous growth potential in expanding cosmetics and skin care.

Bernstein said Beauty Brands is set for growth with plans calling for 33 to 35 locales by the end of 2003. While franchising will play a role, he said most growth would be of corporately owned shops. The company favors high visibility locales in shopping centers anchored by merchants such as Barnes & Noble.

Although drugstores are adding more salon merchandise and specialty stores are experimenting with salon services, Beauty Brands is establishing itself as the category leader in the salon-retail business. “Our customers have proven this is a format that works,” concluded Bernstein.

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