Sally Beauty Company, Inc. - International Growth in the 1980s and 1990s
International Growth in the 1980s and 1990s
Sally Beauty's first international acquisition was a chain of beauty supply stores in Scotland, Ogee Hair & Beauty Supply, which had about 40 outlets and was the largest U.K. retailer of its type. The United Kingdom seemed a good place for Sally to start its international growth, since its parent's hair care brands, Alberto VO5 and Tresemme, were already well-known there. Sally's international expansion proceeded more slowly than its domestic growth. In 1994, the company made its second foray abroad, forming a joint operating agreement with a small beauty supply chain in Japan. Sally chose C&C Cash & Carry Beauty Supply, though it had only four stores. Over the next decade, Sally gradually expanded its presence in Japan. By 1997, the firm operated 12 outlets in that country. That year Sally made another acquisition in the United Kingdom, buying the 30-store chain Embassy Ltd. By this time, Sally had added new stores beyond what it had bought from Ogee, and with the Embassy purchase it now had close to 100 U.K. outlets. The Embassy stores were expected to add some $20 million in revenue. Sally also ventured into Germany in the mid-1990s. In 1996, it purchased a chain of six stores called Friseurland-Kosmetik Gmbh. Sally planned to focus its growth on these three countries—Japan, Germany, and the United Kingdom—for the time being. The firm hoped to have 400 stores in both Japan and Germany eventually. By 2003, it had 150 stores in the United Kingdom, 35 in Germany, and 23 in Japan.
Meanwhile, Sally Beauty continued to expand rapidly at home. By 1997, chainwide sales had reached $880 million, which was half of parent Alberto-Culver's revenue. About 10 percent of this came from Sally's international operations. Domestically, Sally was opening a new store every three days on average in the mid-1990s. It continued to buy up small regional chains. In 1992, the company bought most of the assets of its only large competitor, the 174-store chain Milo Beauty & Barber Supply. Milo, based in Akron, Ohio, was in the midst of bankruptcy proceedings, and its stores went for only $1.3 million. Milo had followed a trajectory similar to Sally's, beginning with Ohio stores in the early 1950s and then snapping up regional chains after 1967. In 1984, it bought an 88-store chain, Beauty Fair USA, which turned out to be a real money-loser. Milo had problems of its own when its founder was murdered, and his brother was convicted of hiring a hit man to do the crime. Milo, with less than 200 stores, was a distant second to Sally in size. By 1993, Sally had over 1,000 stores. That year, it bought Beauty Biz Inc., an Oklahoma chain of 35 retail beauty supply stores. Through acquisition and opening new stores, Sally Beauty had more than 1,800 retail outlets by 1997.
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