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    Top Companies Report

    28. John Paul Mitchell Systems

    ...

    28. John Paul Mitchell Systems
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    07.01.19
    Beverly Hills, CA
    www.paulmitchell.com
    Sales: $475 million

    Sales: $475 million (estimated).

    Key Personnel: John Paul DeJoria, co-founder and chairman of the board; Angus Mitchell, co-owner; Michaeline DeJoria Heydari, vice chairman; Paul Mitchell, co-founder.

    Major Products: Professional hair care products. Brands include Paul Mitchell, Tea Tree, ManulaOil, Neuro, Neon, Awapuhi Wild Ginger and Mitch.

    New Products: InvisibleWear shampoos, conditioners and styling whips, MVRCK men’s grooming and styling products, vegan hair color and hair care options, Neuro Liquid Repair and Restyle Set, Treat Yourself Obsessed Box.

    Comments: The professional hair care market continues to face major challenges as hairstyles and distribution change. According to a study by Professional Consultants & Resources (PCR), Plano, TX, all types of salon service revenues grew by only 1.7% in 2018. Industry barriers to growth, like distribution changes, M&As, brand consolidation, restages and fierce competition continued at top manufacturers.

    “In 2018, the US economy’s GDP growth was 3%. Yet Sally Beauty declined -0.5%, BSG grew at 0.3%, and Salon Centric grew 3%, mainly due to Redken and partner brands,” explained PCR’s Cyrus Bulsara. “These two major distributorships comprise around 55% or more of the entire salon industry. Their flat-to-low growth is a bellwether of total salon industry growth, trends and future growth.”
    Furthermore, salon visit frequencies grew only at suite-rentals, family-economy chains Great Clips and Sport Clips and some independent artistic salons. Rentals do not retail well, thus impacting growth and diversion continues to flourish.

    “Premium, mall-based salon chains like Regis, Toni & Guy, JCPenney and Ratner, continue declines in both clients and revenues, and economy chains like Great Clips and Sport Clips grow,” added Bulsara. “Geographic regions of both good and poor economy exist across the USA. Growth comes from salons in good economy areas. Poor economy areas are seeing service and retail declines. This is the multiplicity of factors that is impacting and hampering salon industry growth.” 

    With problems like these, it is no wonder that DeJoria turns to Patron…and real estate, too.

    Last month, DeJoria purchased McDonald’s 80-acre campus in Oak Brook, IL, after the fast food giant vacated the property. A purchase price was not disclosed. The site includes the McDonald’s former main office building, the Hamburger University training site and the Hyatt Lodge.

    It’s unclear what DeJoria plans to do with the location, but the 218-room Hyatt hotel will reportedly remain open.

    “This campus comes with a rich history and significance to the community, and there’s such beauty throughout the entire site,” DeJoria said in statement. “I am honored to continue that legacy and we look forward to welcoming the next generation of special guests and corporations to the property. There’s most certainly going to be a bright future ahead.”

    Town officials agree. David Carlin, president of the Greater Oak Brook Chamber of Commerce, said DeJoria is a great addition to the village.

    “When the founder of iconic brands as Paul Mitchell and Patron Spirits Company invests in your town, it means your future is bright,” Carlin said.
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