ARDEN, TRICOCI TO MERGE, FORM BIGGEST SPA FIRM
Byline: Kerry Diamond
NEW YORK — The spa and salon industry has a new powerhouse — Elizabeth Arden Salon Holdings. The company has agreed to merge with Mario Tricoci Hair Salons and Day Spas as part of a deal with the investment group North Castle Partners, which bought a controlling interest in both companies.
The new entity, which will operate under the Arden Salon Holdings name, is expected to have sales of more than $160 million in 2000 — making it the biggest player in the fragmented, $14 billion spa and salon industry.
“We share a common vision for this industry,” said David Stoup, president and chief executive officer of Elizabeth Arden Salon Holdings. “We saw an opportunity to consolidate a growing business and use these two brands to pull it together.”
Stoup will be chief executive officer of the new company and Mario Tricoci will be president.
Currently, the two companies operate 141 salons and spas. These include 20 Elizabeth Arden Red Door Salons & Spas, 100 individual brand-name department store salons owned and operated by Arden Salon Holdings, 16 Mario Tricoci Hair Salons and Day Spas and five Tricoci Too salons that offer hair, color, makeup and nail services.
Although Arden has more locations, the two companies have comparable sales. According to industry sources, Arden will hit between $86 million and $88 million in sales in 2000, while Tricoci is projected to do $82 million.
The new company plans to expand to more than 300 locations over the next five years. The team expects to use its experience in Chicago — where Arden and Tricoci are said to do $90 million in combined business — as a model for expanding into other cities, like New York, San Francisco, Dallas and Los Angeles. Tricoci is based in Chicago and the majority of its outlets are located in that area. Arden Salon Holdings has one Red Door Salon there.
Two divisions the company plans to expand aggressively into are resort and Tricoci Too. Arden recently entered the resort business and the company has five resort locations under development with various hotel partners like Westin, Marriott and Regent. The first is slated to open this June at the Marriott Seaview in Seaview, N. J.
Stoup and Tricoci are developing a new casual spa concept, which has yet to be named. One of the first initiatives is to create “a university of beauty,” as Tricoci described it. This would be an actual school where employees would be trained in the Tricoci and Arden methods. The first school would be located in Chicago. “Training is the backbone of this service industry,” said Stoup. “We’re dedicated to providing world-class training for all our people.”
While Stoup and Tricoci knew each other by reputation, the two only met about eight months ago — several months before each was contacted by North Castle. They grabbed a quick cup of coffee at Chicago’s O’Hare Airport and chatted about work. “It was love at first site,” joked Tricoci. “We had the same goals and integrity about the industry.”
“It was quite coincidental,” added Stoup. “We had no idea we would be in formal negotiations shortly after that.”
Tricoci opened his first salon in 1963 in Chicago, then restructured his business in 1977 after noticing a change in what women were looking for at their hair salons. “We saw that the future was wash and wear and quick services,” he noted. Then in 1987, Tricoci launched his first day spa. Tricoci Too was launched 3 1/2 years ago.
Stoup’s company bought the Red Door name from Elizabeth Arden’s parent company, Unilever, in 1992. The number of Red Doors had dwindled from 41 at the time of Elizabeth Arden’s death in 1966 to two, which was a reflection of Unilever’s interest in consumer goods rather than in service-intensive operations.
If Tricoci and Stoup have their way, spas will become more accessible to the average person, just like computers, gourmet coffee and designer fashion.
“We dream of spas becoming every person’s reality,” said Stoup, “not just those who live near Michigan Avenue or Fifth Avenue.”