A popular tanning biz feels the heat

[Neon Beach]

A popular tanning biz feels the heat

Todd Beckman, president of The Tan Company, has struggled to keep the industry's negative press out of the spotlight, but will his business get burned?

By Jessica Dickler, CNNMoney.com staff writer
June 19 2007: 3:28 PM EDT


NEW YORK (CNNMoney.com) -- Todd Beckman, president and founder of The Tan Company, has constantly fought negative press about the $5 billion industry and now faces a summer slowdown, but he insists his business can survive the intense heat.
Despite Beckman's assertions, for an industry that is highly subjective to fads, seasonality and growing concerns about the dangers of ultraviolet (UV) exposure, the future of indoor tanning is not bright.
Todd Beckman, president and founder of the Tan Company, has worked hard to combat negative press about tanning.
VideoMore video
Self-tanning lotions are crowding store shelves, but do they work? CNN's Judy Fortin has more.Play video




Beckman, 42, has been touting tans for a long time. He launched what was originally called The St. Louis Tan Company in 1994. After overwhelming customer demand at the time, he opened a superstore later that year with 30 tanning beds.
By 2000, the St. Louis Tan Company had 15 locations. Looking to grow outside his local market, Beckman changed the name to the Tan Company and began franchising in 2001.
In 2006, Dave Lageschulte - who was granted the first Hooters restaurant franchise license and became one of the chain's most successful franchisees - purchased a 50 percent ownership stake in the company.
Now the Tan Co., whose competitors include Planet Beach, Hollywood Tans and Palm Beach Tan, has 72 locations in 12 states and expects to grow to 100 locations by the end of this year. According to the company, salons had average revenues of $550,778 and an average profit of $213,278 in 2006 - making it one of the industry's major players.
Feeling the heat
While the tanning industry earns about $5 billion annually, according to the Indoor Tanning Association, growth has been uneven as the trend shifted away from an over bronzed look in favor of a natural glow.
Beckman hopes that as long as some fashionistas and socialites like Paris Hilton are sporting dark tans, customers will return to the salons. "There's always someone out there in the limelight that's tanning," Beckman said.
And to survive the summer months, when business falls 30 to 40 percent as customers opt to lie by the pool instead, the Tan Co. relies on annual membership fees to boost revenue during the off season.
But the biggest challenge to the business stems from the $35-billion cosmetic industry, which has spared no expense marketing sun screens and self-tanners as healthy alternatives to baking.
"They have a whole lot more money," Beckman says, "We don't have billions to advertise as big as they can."
A skin-care business flourishes
The effort has paid off too, anti-aging skin-care products have become hugely popular in the U.S., thanks to strong demand among women and Baby Boomers, according to market research firm Mintel International.
To counter the cosmetic industry's push away from tanning salons, Beckman says his only option is to educate his employees about tanning so they can inform their customers about tanning safely and prohibit them from stepping back into a booth if they have been overexposed from a previous tanning session.
But findings from organizations like the Skin Care Foundation that tanning increases the risk of various forms of skin cancer may prove to be insurmountable.
According to the Foundation, not only are people who use tanning beds 2.5 times more likely to develop squamous cell carcinoma and 1.5 times more likely to develop basal cell carcinoma, but exposure to tanning beds before age 35 increases melanoma risk by 75 percent.
According to the FDA, people who choose to tan are greatly increasing their risk of developing skin cancer - and premature aging of the skin will occur in everyone who is repeatedly exposed to the sun over a long time.
And as public health experts and medical professionals continue to warn people about the dangers of UV radiation from the sun, tanning beds and sun lamps, the tanning businesses may end up burned.
Beckman admits that more of his customers are expressing concern about what the tanning beds will do to their skin. But despite the growing awareness, Beckman is confident that his business has a bright future pointing to the popularity of tanning among Baby Boomers, "Baby Boomers are still our biggest customers," he insists.
"They are more conscious of how they look, and you look healthier when you have color."

http://money.cnn.com/2007/06/19/smbu...ion=2007061915

	Superior UV

[billable]

Can a tanning salon get any good press in the national media? Let's see...

Despite Beckman's assertions, for an industry that is highly subjective to fads, seasonality and growing concerns about the dangers of ultraviolet (UV) exposure, the future of indoor tanning is not bright.

Oops. Not looking too positive.

While the tanning industry earns about $5 billion annually, according to the Indoor Tanning Association, growth has been uneven as the trend shifted away from an over bronzed look in favor of a natural glow.

$5 Billion, eh? I need to raise prices.

But the biggest challenge to the business stems from the $35-billion cosmetic industry, which has spared no expense marketing sun screens and self-tanners as healthy alternatives to baking.

healthy alternatives to baking??? Does this sound positive for tanning?

"They have a whole lot more money," Beckman says, "We don't have billions to advertise as big as they can."

Duh, ya think?

To counter the cosmetic industry's push away from tanning salons, Beckman says his only option is to educate his employees about tanning so they can inform their customers about tanning safely and prohibit them from stepping back into a booth if they have been overexposed from a previous tanning session.

That ought to do it... "We're not telling you the dermatologists and the national media are wrong about tanning killing you, just don't burn...

But findings from organizations like the Skin Care Foundation that tanning increases the risk of various forms of skin cancer may prove to be insurmountable.
According to the Foundation, not only are people who use tanning beds 2.5 times more likely to develop squamous cell carcinoma and 1.5 times more likely to develop basal cell carcinoma, but exposure to tanning beds before age 35 increases melanoma risk by 75 percent.
According to the FDA, people who choose to tan are greatly increasing their risk of developing skin cancer - and premature aging of the skin will occur in everyone who is repeatedly exposed to the sun over a long time.
And as public health experts and medical professionals continue to warn people about the dangers of UV radiation from the sun, tanning beds and sun lamps, the tanning businesses may end up burned.

To **** with all the latest research coming out about the health benefits of tanning, keep preaching the sunscare mantra that we have heard for years. And don't worry about trying show the research that you got this info from. A doctor said it, it must be true, right?

Beckman admits that more of his customers are expressing concern about what the tanning beds will do to their skin. But despite the growing awareness, Beckman is confident that his business has a bright future pointing to the popularity of tanning among Baby Boomers, "Baby Boomers are still our biggest customers," he insists.
"They are more conscious of how they look, and you look healthier when you have color."

Read this last part carefully and try to back up and read it from the perspective of someone that isn't in the tanning industry. This Beckman guy sounds like he knows tannning is killing people but is lining his pockets with their money anyway, doesn't he?

I bet he thought he had a real opportunity to get some great national exposure from this. I wonder how he felt when it came out?

[billable]

...and people wonder why I want out of this crazy industry. I provide a service that I believe not only makes you look better and feel better, I believe it actually makes you healthier. Try to convince your customers that. The more you try the more you sound like a liar. I mean, everybody knows that tanning causes cancer, right? Why are you trying to deny it? You must be lying to me just to get my money.

[Neon Beach]

[Gidget]

30 beds in one location, thats a lot, place must be huge!

[billable]

It is big, but there are bigger. I believe that the future of tanning lies in these megasalons. It is hard for a 10-15 bed (or smaller) salon to compete with them. And it helps to have many beds to spread fixed costs.

[dcjjp2]

I disagree with the bigger is better philosophy. The average overhead is 3-4X as much as a regular 8-10 bed salon. In tough times, I know I'd rather pay less overhead with less people coming into the doors vs. more overhead.

[billable]

Usually, bigger equals less per square foot.

Usually, bigger means, in slow times, you can keep your staff busy with something rather than paying them to stand around waiting for customers to walk in the door. With a small salon, there are too many times that I have 1 person working. All the stock is put up. Everything is clean. Standing there leaning on the counter waiting for a customer while I am paying them by the hour.

I see advantages to both, but IMO a large salon has more advantages if managed properly.

[vettes]

nope!

[billable]

OK.