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Zotos Plans Image, Performance Boost

DARIEN, CONN. — Zotos International is looking to become a more competitive player in the salon hair care market by implementing a strategy that will shape up both its performance — and appearance — equally.<br><br>On Wednesday...

DARIEN, CONN. — Zotos International is looking to become a more competitive player in the salon hair care market by implementing a strategy that will shape up both its performance — and appearance — equally.

On Wednesday night, the Darien, Conn.-based hair care company owned by Japan-based Shiseido, unveiled a 5,200-square-foot training center, called the Isao Isejima Artistic Institute. The facility, named after Isejima, a past president for both Shiseido U.S. and Zotos, has two purposes. The first is to serve as a training center for hairdressers and distributors’ salon clients. The other is to serve as a research and development center that will develop and test products the company can ultimately sell.

The center, which was designed by architect Chris Kofitsas of New Jersey-based New World Design, combines a high-tech and modern look with metal fixtures and hardwood and Indian copper-tiled floors. Styling stations were built to accommodate up to 30 clients for hands-on training. And, since the stations are modular, they can easily be removed to another part of the room to make space for large meetings.

While part of the company is focusing on upgrading its image, the other part is making sure Zotos’ newest business is fitting firmly in place. Just six months ago, Zotos acquired City of Industry, Calif.-based Joico Laboratories, a $100 million company best known for its K-Pak deep conditioners. The deal lands Zotos deeper in the salon industry and positions it as the third-largest salon manufacturer behind L’Oréal and Wella.

“Joico also better diversifies the Zotos portfolio, which historically had a disproportionate amount of business in the permanent wave treatment segment,” Seidl said.

Zotos is made up of both hair care and permanent wave products. Hair care brands range from mid-priced Bain de Terre to Iso, which Zotos acquired in 1996 from Helene Curtis. Iso, which stands for innovative styling options, includes the Iso and Multiplicity brands, which target a twentysomething audience. Quantum and Neo are a permanent wave and a texturizing product, respectively.

Zotos brands can be found in 54 percent of U.S. salons, or 75,000 locations. Joico products are sold in 45,000 salons nationwide and approximately 75,000 salons worldwide. Its international distribution is one of the things that made Joico an attractive acquisition candidate.

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“Joico has a much greater percent of its business generated internationally than any other company in the industry,” Seidl said.

With a subsidiary in Vancouver and one in the Netherlands, about 40 percent of Joico’s sales are generated internationally. Future distribution opportunities exist, especially in Japan, where Shiseido has a very large presence.

Another reason Zotos bought Joico was its strong salon image. “If there is a pure salon company, like Aveda is a pure salon company, it’s Joico. They don’t try to be anything but a salon company,” Seidl said.

He points to Joico’s low mass and beauty supply store distribution volume — less than 10 percent — as proof of the brand’s appreciation for the dynamics of the professional business. Comparatively, Seidl estimates that many salon brands rely on mass and beauty supply stores for most of their volume. “I wouldn’t be surprised if 35 to 40 percent of sales of salon products were generated through stores.”

Joico also has depth in salons, Seidl explained, meaning that once they’re brought in, Joico is treated as a salon’s primary line. “That affords us different kinds of relationships with salons,” Seidl said.

Like many entrepreneurs, Joico’s tendency to be creative and different helped it achieve its current success. Seidl’s intention is to retain the company’s idea-generating character, but also bring it some business and discipline principles.

“We are going to invest a lot of money into this business,” Seidl said, adding that research and development is one of the things that was compatible between the companies. “There will also be far more marketing money to merchandise product, such as point-of-purchase merchandising and education.”

Indeed, in the salon business, there is a tendency to put the product on the shelf and let it sell itself. But Seidl is looking to another industry as a role model for selling salon products. “In cosmetics, they spend a tremendous amount of money to educate and direct a consumer to a product and I think there is a real competitive advantage to that,” Seidl said.