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SALON—Doing Well Is Best Revenge

Gauthier Total Image Spa Core Business: Hair, beauty and personal care products, treatments and services Year Founded: 1991 Revenue in 1991: $180,000 Revenue in 2000: $892,000 Employees in 1991: 2 Employees in 2000: 16 Goal: To continue to grow and expand Driving Force: The trend to more use of color in fashion and beauty styling and the increasing interest in wellness and pampering A Sherman Oaks couple have taken the lessons learned in an old-fashioned party-plan cosmetics business and applied them to the day spa world Inside Gauthier Total Image Spa, technicians perform microdermabrasion and give herbal wrap treatments. Therapists knead bodies with techniques said to promote wellness and energy balancing. With such New Age trappings, you might never guess that the business began and continues to prosper on the old-fashioned principles its proprietor learned selling party-plan cosmetics. Thanks to her early training, Barbara Gauthier and her husband Richard transformed a retail cosmetics counter into a 2,800-square-foot day spa offering everything from facials to cosmetics makeovers and hairstyling with a regular, returning client list of 5,500 people, an annual growth rate of more than 14 percent each year since the mid-1990s, and sales of $892,000. Last year, Sherman Oaks-based Gauthier Total Image Spa was named one of the 200 fastest growing salons in the country, out of a field of 25,000, by the industry’s trade magazine, “Salon Today.” “What’s the main thing in direct sales?” asked Gauthier. “You can’t wait for things to happen. You have to go out there.” “California is really a unique area,” said Deborah Carver, publisher and chief executive officer of “Day Spa” magazine. “We’re in the center of the beauty industry. All beauty services are expanding into other areas, but a place like Gauthier, they’re offering things these other places aren’t offering.” Back in the 1960s, when there were far fewer opportunities for women who wanted to join the business world, Barbara Gauthier took a job selling party-plan cosmetics for a Mary Kay competitor. Forced out when the company was acquired in 1985, she rented space in a neighborhood hair salon and, with a $10,000 investment, set up a cosmetics counter. Without a cosmetician’s license permitting her to apply makeup and skin care products, Gauthier resorted to teaching her customers how to do it themselves, offering advice on the colors and treatments that would bring out their best features and improve their appearance. The go-go ’80s, with its status symbols and “living-well-is-the-best-revenge” mindset, proved an ideal time for Gauthier’s customized cosmetics services. When sales reached $6,000 a month, she hired her first employee, an esthetician she located on another floor of the building, and in 1991 the company moved into its own quarters. With a loan of about $100,000 and half the square footage the spa now occupies, Richard Gauthier left his job with Pacific Bell and came on board to help manage the growing business. To build a customer base, Barbara Gauthier began a series of speaking engagements at women’s clubs and local events. She taught classes with catchy titles like “Color That Makes the Most of You” at Learning Tree University, eventually moving the classroom from the campus to her own salon, where they still take place. Gauthier’s staff of estheticians, consultants and therapists offer everything from image makeovers to facials and peels, herbal body wraps to massages, reflexology to eyebrow tinting and waxing. Prices can range from $13 for a lipstick to $100 or more for a massage and $125 for a private style and color consultation for those who want to show off the best and hide the rest. The Gauthiers point out that, as a small business, they don’t have the resources to do the kind of advertising big cosmetics companies or department stores use. Instead, they use a variety of promotions borrowed from the direct sales industry to keep their current customers coming back and to attract new ones. Current clients who refer new customers get a 15-percent gift certificate to the spa. When they have referred four customers, they receive a $100 gift certificate. Last year, 61 of Gauthier’s clients made four referrals each, Barbara Gauthier said. “Those 244 people spent $19,000 here. That’s a pretty good return on advertising. And what about all the other people that didn’t have (as many as) four referrals?” While such programs have been successful at building sales, the Gauthiers say making a profit offers more challenges. “That’s part of our dilemma,” said Richard Gauthier. “Ten years later, our volume is sky high, but expenses are higher.” Actually, gross margins range between 8 percent and 10 percent, enough to eke out a profit, but the Gauthiers point out that competition from other spas means they must often hold prices down even when operating costs rise. Each time the business reaches another revenue level, the Gauthiers expand their space along with their staffing. But in the future, they hope to manage further expansion without enlarging their quarters. “We’re going to expand our hours and double-shift, so we can serve our clients without increasing overhead,” said Barbara Gauthier.

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