Shopping Centers Today

MAR 2017

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 18 of 59

M A R C H 2 0 1 7 / S C T 19 expanding the array of products and services they offer to boost revenue and heighten their competitiveness. Often two or three nail salons are at a single busy intersection, observes Weinkranz. "Price is still very competitive, but the way they differentiate is on the services that they offer and the quality of the fit- out," he said. Operators also are working harder to draw repeat traffic. Consider the idea of a manicure-and-pedicure happy hour: A California law took effect in January that allows beauty salons and barbershops to offer one complimentary serving of wine or beer. Some nail salons have introduced annual membership clubs that charge a flat fee in exchange for discounts, sales offers and priority bookings. Among the wide variety of services that nail salons offer now are traditional and long-lasting gel products, customized nail-art designs, relaxing soaks, exfoliating scrubs, massages and hydrating skin treatments. Going beyond nails there are waxing, eyelash- tinting, skincare and Botox services. "Now a lot of these nail salons are more [like] spas, offering a lot of different services," Weinkranz said. Which is fine by landlords. "The nail salons that we seek out and actively recruit are designed, constructed and finished much like day spas," said Erik Coslik, a vice president at the Fort Worth, Texas–based Woodmont Co., a development and real estate services firm. The challenge for nail salons in delivering that type of a high-end experience is that it can be expensive. Typically, independent operators have to foot much of the store build-out bill themselves. "In any business, there are a limited number of people that can access that kind of capital," said Coslik. And getting a return on the investment, he cautions, may prove challenging for some operators. n said, a new generation of nail salons are popping up, one that is catering to consumers looking for a more premium experience, salons with a stylish ambience and upgraded amenities." Irvine Co. has welcomed several of these newer luxury nail salons to its properties in recent years, including Cosmo Nail Bar, GLO Nail Bar, Holly & Hudson Nail Lounge and Polished Perfect by Twila True. One of the Irvine portfolio's most recent additions is an Images Luxury Nail Lounge that opened at Woodbury Town Center, in Irvine, Calif., in December. Images Luxury Nail offers services costing anywhere from about $500 to upwards of $25,000 per visit (that upper figure for a private "glitz and glam" experience includes a diamond-bejeweled manicure). "Because there are so many nail salons in every city and community, we are looking for that extra-special something for these newer concepts that bring another level of service and quality not found elsewhere," Collings said. Nail salons today are certainly an emergent power within the health-and- beauty market. In the U.S. alone, the hair-and-nail-salon industry combined posted an estimated $54.1 billion in revenues last year, according to a research report IBISWorld produced in November. Nail-care services specifically (not including other beauty services and merchandise sales) accounted for 15.9 percent of that, or roughly $8.6 billion. IBISWorld also projects that revenue for the hair-and-nail-salon industry will continue to grow over the next five years at an annualized rate of 2 percent. To be sure, the industry is fragmented. And it is heavily populated with discount models and small mom- and-pop shops, leading to some service inconsistency, asserts salon chain founder Twila True. "We believe there is room for growth opportunities for studios like Polished Perfect by Twila that maintain a vision for elevating the nail industry," she said. Polished Perfect now operates six salons across Orange County that offer "affordable" luxury she calls competitive in price, service, salon aesthetic and cleanliness, as well as fashion trends and nail art. The increase in multisalon operators notwithstanding, large regional and national chains remain rare. One of the largest chains by shop count is Regal Salons. This chain, founded in 1997, negotiated a deal to locate its corporate or franchised salons within or directly adjacent to Walmart stores. This arrangement has helped Regal grow significantly: The chain operates some 900 salons across the U.S., Canada and Puerto Rico. Among the well-known names is Happy Nails & Spa, a family-owned business started by Mai and Henry Huynh in 1983, which now operates about 50 salons across California. Holly & Hudson Nail Lounge, another California salon chain, has operations in Pacific City and Newport Beach. Nail salons have benefited from a strong economy and a rise in discretionary spending over recent years. Operators have also been Salons are offering additional services and luxurious interiors to stand out from the competition

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