While beauty industry news has shaken the stock market for beauty companies in recent weeks, Sally Beauty Holdings representatives and industry experts aren’t concerned about implication for the company.
When Amazon announced a new professional beauty store for industry professionals, stock in Denton-based Sally Beauty and competitors such as Ulta lost value.
However, the announcement doesn’t signal direct competition for Sally, said Jeff Harkins, vice president of investor relations and strategic planning.
“All of those brands are found in retail stores and they have been for a while, but they’re not what we consider pro brands,” he said. “Their definition of professional beauty isn’t the same as ours.”
Instead, the brands Amazon is rolling out are already readily available for customers, both professionals and consumers. Lines like Rusk and OPI are available at retailers such as Walgreens and CVS in addition to beauty stores.
Sally Beauty’s stock dipped more than $2 a share June 24. It started the day at $14.79 a share, and closed at $12.30. More than a week later, the stock closed at $12.50 Friday. Industry analysts wrote throughout the week about how the stock didn’t rebound, with Yahoo Finance saying the stock “looks bleak.”
While the company will not comment on stock prices, Harkins said Sally is not going to change its plans for the coming year and that this doesn’t change the company’s competition. Instead, they’re focused on rolling out a new digital application for their loyalty members and other e-commerce initiatives.
“We have our opinions but we don’t share those,” he said. “We’re focused on the long term.”
Linda Mihalick, the senior director of Global Digital Retailing Research Center at the University of North Texas, said even if Amazon is successful, Sally will keep a hold of the market. In price comparisons, right now Sally has an advantage.
“I like Amazon, too, and there’s press and noise about it, but as a simple sampling, three of the four products were more expensive,” she said. “It’s really about how Sally’s reacts to this and how they adapt and say, ‘We can do this, too.’”
Plus, Sally has existing relationships with stylists and salons, Harkins and Mihalick both said. Stylists are relationship builders, plus Sally’s representatives help customers understand their products and host information classes — something Amazon can’t compete with, Harkins said.
“One of the reasons people love us so much is we have more than 1,000 direct sales representatives in the field,” he said. “This is a very high-intensity relationship and education process, and there’s a finite amount of stylists out there. This isn’t retail.”
Overall, Mihalick said he believes that between new initiatives and retail stores, Sally will be able to adapt and succeed despite Amazon’s launch.
“I’m positive and bullish about them because they have a lot in their tool kit,” she said. “My overall opinion is I think Sally is just a solid business — they have to leverage the assets they have [and] they just have to look at them differently.”