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I love Derf!!
![]() Join Date: Oct 19 2000
Location: Tampa, Florida
Posts: 1,455
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Re: Australian Gold buys California Tan
This is from my GSK Newsletter 60 dated May 30th, 2006: What if???? ETS, Inc. Bought California Tan For about a month, whispers of a deal that ETS, Inc. is buying California Tan have been running crazy thru the indoor tanning industry. I think big changes are on the horizon for the indoor tanning industry. This is something that could be happening or maybe just “someone making it all up”, Who knows for sure? I do not know if it is real or not. From my personal view, why this could happen; I think the investor group that owns California Tan would love to sell the company and get back their investment. Their biggest problem is who would buy it, given the current indoor tanning market conditions. Looking at the entire indoor tanning industry their seems to me be very few potential buyers. One of the indoor tanning industry companies that could afford to purchase California Tan would be ETS, Inc. ETS, Inc. does have a history of buying other brand names then incorporating them into their family of brands. Just remember that ETS, Inc. purchased the trademark rights to Swedish Beauty. I think, ETS, Inc. does have the capital and ability to do this deal. In my view, I think that California Tan would be very attractive to ETS, Inc., the indoor tanning brand recondition of California Tan, Matahari, Emerald Bay, and the associated trademarked product names would have a lot of value to ETS, Inc. The other associated California Tan items like lamps, sunless and other products can be easily incorporated with ETS, Inc. current operations or spun off. I feel ETS, Inc. would be the perfect buyer because it already has sales people working distributor and tanning salons worldwide plus administrative, marketing, purchasing, warehouse and other operations, so they could purchase California Tan then immediately eliminate all the redundant corporate staff/overhead. The savings would be measured in the millions of dollars, improving the profitability fantastically. That would make it a very wise financial investment but that is not the only reason I would see doing this deal. The more important reason other than money is control. What do I mean by Control? I feel if ETS, Inc. added the California Tan brands to it’s family of product lines, then they would have a “more” dominate position in the indoor tanning industry because they would control have most every “major” brand of indoor tanning products except for Designer Skin (as well as Pro Tan, Fiji, Synergy, Supre and others). I think then ETS, Inc. next move would be to use that advantage as a tool, to make distributors choose between the ETS family of brands and all other brands of indoor tanning products. This would not be the first time in the industry, this has happened. Back in the late 1990’s, California Tan was the number one brand and forced distributors to choose between stocking it and stocking Supre products. To sweeten the pot for distributors, I think ETS, Inc. would promise a return to realistic profits for distributors on their product line thru “uniform discounting/pricing” by it’s exclusive distributors. For salons, I think ETS, Inc. would promise a “final solution” to the diversion issue on the ETS lotion brands to justify reduced discounts (higher net salon prices on lotions) as well as increased incentives for exclusivity. Currently, the reality is most indoor tanning distributors are basically breaking even selling lotions with the current discounts offered to tanning salons. I think many distributors would consider going exclusive with the ETS family of brands and being “guaranteed” a profit on lotion sales. I feel that would be very attractive even with losing the ability to sell Designer Skin and other brands of lotions. Other distributors would stay with Designer Skin and other non-ETS brands of indoor tanning products to serve salons that wanted those products. It would be a brave new world, for the indoor tanning industry. Change will happen. How and why it happens is anyone’s guess! Easy to predict! This was just too easy to predict. The investors in California Tan wanted out and the new owners of ETS, Inc. could use this as a way to gain more control over the indoor tanning industry at a very low cost with fantastic upside potential. So what happens now???? I have heard that not much will happen this year that: “We are already too close to tanning season to see major changes.” I disagree completely. I think ETS will use their new found industry dominate power to force distributors to focus on selling the “new” ETS family of product over every other brand names of indoor tanning products sooner rather than later to realize increased sales and control now! What happens next will effect thousands of tanning salons that have put their “profits and success” into the trust of these major name brands and distributors. After years of suggesting one brand over another…. If your distributor is suddenly telling you to switch products or “raving” about the fantastic success of one brand or product…. Just think to yourself are they serving your interest... or theirs???? Just a reminder!!! You determine what is the top selling product in your salon! No brand of indoor tanning does any consumer direct advertising! So, the only way tanners know brands of indoor tanning products is what they see and are told about in your salon! You control what sells, no one else!
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Greg Klesius GSK Resources |
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