Summer 2006

Progress
An Update for Members of the Professional Beauty Association

Event Spotlight

Las Vegas | July 16-18, 2006 | Mandalay Bay

Turn to page 8 for more information

w w w. c o s m o p r o f n o r t h a m e r i c a . c o m

do?
what does pba
Inside this Issue

Letter from
the Executive Director 2

PBA Branding Campaign 2

Government Affairs Update 3 We raise standards and expectations.

DC Hill Visits 3
We’ve got your back in Washington, DC.
Gift Cards & Certificates 4
We offer business education to make you better.
Welcome to Our World 4

NAHA Finalists 4 We introduce you to other industry leaders.

Distributor Section 5
We host events to build your business.
Restrictive Covenants 6

Manufacturer Section 7
We celebrate the industry.

ABBIES Winners 7 We connect you to business solutions.

Cosmoprof North America 8
We tell the world why professional is best.
TSA Section 9

Symposium 11 9 We’re here for you.

TSA Survey 9

Tips for Salon Retailing 10

Member Profile: Jim Markham 11

Government
Affairs Update!
Benefit Highlight: Legal Ease 12 Turn to page 3
for important news.

Success by association.
PBA_summer06_nwslttr 1 5/22/06, 1:38 PM
 2
From the Leadership
What Does PBA Do?
I hear the question as I walk the floor at trade
shows, talk with industry leaders and reach
out to past members. It’s such a simple
question, but it has a powerful focus. What
does PBA do? Over the last year, PBA’s
volunteer leadership has been refining
the response to that question. The simple
answer is the core purpose that came out
of the strategic plan process: PBA advances
the professional beauty industry.
Of course, the strategic plan helped us dig much
deeper into how exactly we work to advance
the industry. The leadership wrote six goals—
outcome-oriented statements that focus the
organization’s efforts. This year, we are focusing
primarily on the first two goals. (You can find a
list of all six goals—and the full strategic plan—
at www.oneroof.org/strategicplan.)
Member Value. Members of the Professional
Beauty Association will enjoy the competitive
advantage of access to an unparalleled
portfolio of products, services and benefits.
Each membership section is seeking to
increase member value. Activities include the
Center for Business Education, an expansion
of the manufacturer Market Shipment Study,
additional “business blueprints” that members
can easily reference and implement, a distributor
business-benchmark research project,
an expansion of networking through
the section listserves and more.
PBA. Success by association.
PBA is taking its message
to the industry with a
new branding campaign.
Based on feedback from
our membership, we’re
highlighting three strengths
of the association: business
resources, peer networking
and government affairs.
www.probeautyassociation.org
PBA_summer06_nwslttr 2 5/22/06, 1:38 PM
Government Affairs. Public policy makers will
recognize the importance of the professional
beauty industry and association members will
benefit from successful advocacy on issues
significant to the industry.
Members tell us this is one of the most
important functions they expect the association
to perform. And it has fantastic potential for PBA Progress
growth. The leadership has responded in the
(Summer 2006)
short term by creating a full-time Government
Affairs Director position at the association’s is a publication of
office in Arizona. In the longer term, the the Professional Beauty Association.
leadership has committed to a physical office
presence in Washington, DC.
Professional Beauty Association
Here’s another way that I might answer that
15825 North 71st Street, Suite 100
simple question, “What does PBA do?” Scottsdale, Arizona 85254
PBA does what its membership requests. 800-468-2274 (480-281-0424)
With volunteer leadership straight from the Fax: 480-905-0708
membership base, PBA is guided by what www.probeautyassociation.org
matters to our members. That doesn’t just info@probeautyassociation.org
mean board members—that means you!
Call or email me. Or contact your leadership The Professional Beauty Association (PBA) is
council’s president (phone numbers and
email addresses are included with their letters a non-profit trade association that represents
further in this newsletter). Help us make this the interests of the professional beauty industry
the association you need.
from manufacturers and distributors to salons
Steve Sleeper and spas. PBA serves the industry with
Executive Director, PBA
800-468-2274 x115 education, government advocacy, commerce
steve@probeautyassociation.org opportunities, research/statistics and public
relations/image building.
Discover what membership in the
Professional Beauty Association can do for
your business.
Be a part of the most powerful network in
the professional beauty industry.
Get your voice heard in the industry, on
Capitol Hill and beyond.
If you have a friend in the industry that
would benefit from being a PBA member,
reach out to them! If you have a client
list that should receive membership
information, let us know! To request a stack
of recruitment brochures complete with
membership applications, call Member
Services at 800-468-2274 (480-281-0424)
or email info@probeautyassociation.org.

PBA Government Affairs
Advocating for Our Industry
Government affairs is a critical growth area
for PBA. Past surveys indicate that this is
a priority for membership. And it is an area
where the association can have a tremendous
influence on the environment in which we
do business. In response, PBA’s leadership
made government affairs a top priority among
the six stated goal areas in the association’s
strategic plan.
What does it mean to make government affairs
a priority? PBA’s government affairs activities
should serve several purposes:
Capitol Hill Watchdog. PBA will serve as
a watchdog, keeping tabs on legislative and
regulatory issues that could impact businesses
in the professional beauty industry.
Legislative Advocate. PBA will sponsor
and support legislation that will strengthen
our industry. (For example, TSA is currently
pushing tip-tax legislation in the House
and Senate.) The association will also
oppose legislation that could harm member
businesses.
Information Source. PBA will alert members
to issues, legislation or court rulings that
influence our business environment.
Power in Numbers. When businesses join
together in an association, they are more
powerful advocates at the local, state and
national level. PBA will help members speak
their mind to legislators and policymakers.
(For example, TSA members successfully
challenged changes to the Small Business
Administration’s definition of a small
business.)
How do we get there? The association’s
leadership has authorized the following
expenditures:
Government Affairs Director. PBA will
create this position at the association’s Arizona
headquarters. This director-level position
will serve as a resource for membership,
a contact for legislators and their staffs, a
conduit for consultants and a liaison with
other organizations. This position will also
be responsible for tracking issues that could
impact the professional beauty industry.
Expanded Budget for Committee. PBA
is allotting more funding to the government
affairs committee budget to help support new
projects proposed by the Government Affairs
Director and committee members.
PBA_summer06_nwslttr 3 5/22/06, 1:38 PM
Future DC Presence. In the longer term,
the association’s leadership has signaled their
intention to fund a permanent Washington,
DC presence for the association. Any DC
hires would come under the direction of the
Government Affairs Director in Arizona.
The money is allocated. The leadership is
motivated. The hiring process has begun.
This is a very exciting time for PBA. Don’t
wait to get involved! Contact Government
Affairs Co-Chairs Frank Zona (781-871-4545
| zona.frank@gmail.com) or Serena Chreky
(202-293-9393 | schreky@andrechreky.com)
to volunteer for the committee or offer your
help in other ways.
“Because PBA’s leadership is made
up of active and engaged member
volunteers, the association is extremely
responsive to concerns and issues that
matter to our membership,” explains
Steve Sleeper, Executive Director – PBA.
“These council members serve not only
as representatives of their membership
sections but as the thinkers and
pacemakers of our industry as a whole.”
To get in touch with members of the
Governing Council or your section’s
Leadership Council, please contact Member
Services at 800-468-2274 (480-281-0424)
or email info@probeautyassociation.org.
Strategic Plan
Goal Statement
Government Affairs
Public policy makers will recognize the
importance of the professional beauty
industry and association members will
benefit from successful advocacy on
issues significant to the industry.
3
DC Hill Visits
Wednesday & Thursday
May 17-18, 2006
PBA/TSA members hit Capitol Hill in May to
drum up support for the association’s tip-tax
relief legislation—the Small Business Tax
Equalization & Compliance Act (H.R. 1345
and S. 327). This legislation would benefit the
industry by freeing up over $600 million!
The legislation has two practical outcomes:
First, it will create a tax credit for employers to
offset the matching FICA paid on employees
tips—just like restaurants received. This credit
will add approximately 1% to the bottom line
of salons and spas with employees. Second, it
will help ensure the IRS’s enforcement efforts
will be aimed at those who do not pay taxes,
not those who do. The legislation protects the
many independent contractors and employees
who do pay their taxes by focusing the IRS on
the real source of the problem—those who do
not report any income at all.
The legislation’s success depends on
members like you driving the issue. Salon
industry professionals from around the
country have written letters, made calls and
visited congressional offices at home and in
Washington to ask their representatives to
support this legislation. The result has been
support from Democrats and Republicans in
both the House and the Senate. Help us keep
the positive momentum going!
Get Involved!
1. We invite you to write letters and make
calls urging your Senators and Representative
to co-sponsor our legislation. Please call
PBA/TSA at 800-468-2274 (480-281-0424)
and let us know you want to help. We can
provide sample letters and talking points on
the legislation.
2. You don’t have to be with us in DC to have
a meeting with your political representatives!
Contact your Senators and your
Representative for a meeting the next time
they are back home. Ask for the scheduler
and put your request in writing. Let them
know you want to discuss co-sponsorship
for H.R. 1345 and S. 327. You can find names
and contact information for your Senators and
Representative at www.congressmerge.com.
 Escheatment: Gift
Certificates and Gift Cards
Gift cards and gift certificates are more
popular than ever in the marketplace, and
salons and spas are no exception. According
to a recent TSA survey, 98 percent of salons
and spas offer gift cards or gift certificates.
However, as state governments look for ways
to bridge their budget gaps, many states
are turning to unused gift certificates as an
additional source of revenue. This process is
known as escheatment, a statute that allows
the government in many states to identify
unused gift certificates as abandoned or
unclaimed property, which then becomes the
property of the state after a certain period of
time. While the laws are different in every state,
currently about half of all states specifically
include gift certificates in abandoned property
and escheatment laws, meaning businesses
that issued these unused gift certificates must
write out a check to the state government.
Like most business owners, PBA/TSA believes
this process is unfair. Many salon and spa
owners rely on repeat business and customer
loyalty and would likely accept a gift certificate
even if it had expired. In their minds, these gift
certificates are never abandoned property.
H o n o r i n g To p H a i r s t y l i n g
The North American Hairstyling Awards (NAHA)
promises to be another exciting event this July! The
most talented and innovative hairstylists from all
across North America will be honored at the NAHA
ceremony Sunday, July 19 at the Mandalay Bay
Convention Center in Las Vegas.
The first-round of judging has just been wrapped up
and we are pleased to announce the finalists:
Master Hairstylist of the Year
Heather Wenman | Entrenous | London, ON
Eric Fisher | Eric Fisher Salon | Witchita, KS
Dusty Simington | Salon Gregorie’s | Newport
Beach, CA
James Morrison | Toni & Guy | Newport Beach, CA
Scott Cole | Colorcutting USA | Carefree, AZ
Hairstylist of the Year
Maureen Anlauf | Juut SalonSpa | St. Paul, MN
Lorraine Wilkins | Enviro Trends | St. Thomas, ON
Anna Pacitto | Salon Pure | Montreal, QB
Zak Mascolo | TIGI Academy | New York, NY
Nick Staley | Salon Gregorie’s | Newport Beach, CA
Salon Team of the Year
Hair After Salon & Spa | Willowdale, ON
Enviro Trends | St. Thomas, ON
Mood by Pure | Montreal, QB
Salon Gregorie’s | Costa Mesa, CA
InPure | Montreal, QB
www.probeautyassociation.org
PBA_summer06_nwslttr 4 5/22/06, 1:38 PM
Some state legislatures agree with TSA and
have passed legislation that would exclude
gift cards and gift certificates from abandoned
property statutes. However, several other
states are still holding out. In the months
ahead, TSA will continue to monitor the
situation and work with state lawmakers to
oppose or repeal harmful escheatment laws.
Bruce Grindy is an economist and government
affairs consultant to PBA. He also works closely
with the National Restaurant Association.
He received a master’s degree in economics
from the University of North Dakota and a
bachelor’s degree from Concordia College in
Moorhead, Minnesota.
Welcome to Our World
Thursday, May 18, 2006
Each year, PBA and other members of the
Professional Beauty Federation invite Capitol
Hill to share an evening with important
members of the small business community
– salon owners and licensed professionals.
At Welcome to Our World, the salon
industry ‘makes over’ Congress. And as the
Congressional representatives and their staffs
experience haircuts, manicures and massages,
Editorial Stylist of the Year
John Donato | Mississauga, ON
Laurentius Purnama | Philadelphia, PA
Michael Baker | Springfield, LA
Veronica Bessey | Carrollton, TX
Michael Albor | Dorchester, MA
Student Hairstylist of the Year
Devin Graciano | Citrus College | Upland, CA
Elle Gomez | Arangio Internazionale | Mexico City
Kirby Keomysay | Capitol School | Omaha, NE
John Paul Colombo | Hair After | Willowdale, ON
Nikki Coletti | Lunatic Fringe/Academy Jake
Thompson | Salt Lake City, UT
Avant Garde
Michael Della Penna | Michael Della Penna’s Hair |
St. Petersburg, FL
Wendy Bond | Oscar Bond Salon | New York, NY
Nicholas French | Matrix Academy | West Hampton, NY
Daniel Holzberger | Van Michael Salons | Smyrna, GA
Jake Thompson | Lunatic Fringe | Salt Lake City, UT
Contemporary Classic
Liza Espinoza-Achurra | Zano Salons | Bolingbrook, IL
Dusty Simington | Salon Gregorie’s | Newport
Beach, CA
Jackie Elliott | Vault Salon & Spa | Winnipeg, MB
Heath Grout | Toni & Guy | Newport Beach, CA
Suzanne Martin | Three Small Rooms | Barrie, ON
PBA members take the time to explain the
issues that are critical to their success as small
business owners: including passage of HR
2100 (anti-tampering legislation), the potential
of a Tip/Tax Credit, the labor shortage and
the Department of Education’s negative bias
toward cosmetology education.
“This annual event brings a $60-billion industry
to Capitol Hill in just one night,” explains
Eric Schwartz, president of the Professional
Beauty Federation. “Our message is that the
entire industry stands united in asking for
support of these important issues.”
Welcome to Our World is a constituent-
based event and is approved by the Ethics
Committee. The event is produced by the
Professional Beauty Federation (PBF). PBF
promotes and improves the professional salon
industry as it relates to government laws and
regulations. Founding members include:
Haircolor
Dorissa Cerven | Le Coupe Sauvage | St. Thomas, ON
Rene Antonio | Salon Gregorie’s | Newport Beach, CA
Wendy Bond | Oscar Bond Salon | New York, NY
Karen Melay | Hair Factory | St. John’s, NL
Adriana Balea | JC Salons | Toronto, ON
Long Hair Dressing
Sonna Brado | Jaazz Salons | Toronto, ON
Curtis Jermonti | Rolf’s in Scottsdale | Scottsdale, AZ
John Graham | Vault Salon & Spa | Winnipeg, MB
Frank Cini | Taz Hair Co. | Toronto, ON
Ann Bray | The Masters | Huntsville, AL
Makeover
Carol Cini | Taz Hair Co. | Toronto, ON
Nakia Spriggs | Concepts | Upper Marlboro, MD
Lorraine Wilkins | Enviro Trends | St. Thomas, ON
Erin Fernandes | Entrenous | London, ON
Fabio Sementilli | Salon Shampoo | Woodbridge, ON
Texture
Jackie Elliott | Vault Salon & Spas | Winnipeg, MB
Robert Barker | Toni & Guy | Alpharetta, GA
Zoe Cohen & Jeremy Taylor | Salon Gregorie’s |
Newport Beach, CA
Karen Melay | Hair Factory | St. John’s, NL
Christopher Vargas | Toni & Guy | Richardson, TX
Make-Up Artist of the Year
Cheryl Gushue | Toronto, ON
Noah | Costa Mesa, CA
Angelia Senevisai | St. Paul, MN
Maria Bikos | Entrenous | London, ON
Giancarlo Intini | Aurora, ON
To see the finalists images, please visit www.hairsty
lingawards.com.

Distributor Section
A Letter from the Leadership
All three leadership councils worked together
closely to shape the recently completed
strategic plan for PBA. The distributor council
has also been focused on short- and long-
term plans for our section in particular. Here
are our top three goals for the next two years:
Improve communication. We will address
distributor-specific issues in this section of
PBA’s quarterly newsletter. In addition, we will
use email and fax blasts to alert distributor
members to pressing, distributor-only issues.
If you have ideas for articles you would like to
see in the future, please email or call me. Or if
you have insights or expertise that you would
be willing to share in the form of an article for
this newsletter, please let me know.
PBA Launches the Center for
Business Education
Top Gun Sales
Manager Training, the
first seminar from
PBA’s new Center for
Business Education,
intrigued both attendees and speakers
alike. The small, informal round-table format
provided a comfortable environment for
distribution professionals to share insights
on their experiences within the industry. Many
attendees particularly enjoyed the networking
opportunities and the chance to gain ideas
from passionate people who experience
similar workplace challenges.
The seminar presenters were Bart Kooiman
(Consulting Manager, Peel’s Salon Services);
PBA_summer06_nwslttr 5 5/22/06, 1:38 PM
Foster peer education and networking.
The success of the Center for Business
Education’s first seminar, “Top Gun Sales
Manager Training,” shows the incredible
benefits of peers sharing solutions with each
other. (See article below.) We are eager to
expand these educational opportunities and
have plans for a “Million Dollar Sales Training”
for your top producers. In addition, the
distributor listserve is beginning to take off.
If you have a question about best business
practices, share it with the email listserve. I
think that you’ll be amazed at the generosity
of responses from peer members.
Provide benchmark research. Our third goal
is to create a member survey chock full of
valuable distributor business benchmarks.
Eric M. West (VP Sales and Marketing,
Columbia Beauty Supply); Tom Conley (GSM,
Marshall Salon Services) and Phil Douglas
(VP Field Sales, Columbia Beauty Supply).
“I learned more than I taught,” says Tom
Conley.“The interaction and sharing of
information was wonderful.”
Creative Store Boot
Camp. This full-blown
store leadership
training program
was designed to
help distributor professionals build and
maintain successful stores. The basic training
included merchandising skills; marketing and
communication techniques; advice on new
consultant training; strategies for grooming
loyal employees; and techniques for mastering
customer service. The open forum and round-
table format encourage the sharing of ideas
from all participants.
Here is just some of the feedback from
attendees:
- “The information was awesome!”
5
This will allow you to compare your percentage
costs and policies to distributors of the same
size. Stay tuned for your survey—and be sure
to fill it out! You’ll only get the results if you
participate.
As president of the Distributor Leadership
Council, I want to invite you to call or e-
mail anytime. We want to design the best
distributor association to support and grow
your business.
Bob Peel Jr.
President, PBA Distributor
Leadership Council
800-362-2084 x102
bjpeel@peels.com
- “Everything that we wanted to cover was
addressed.”
- “The presenters were very prepared, tons of
knowledge.”
- “Good information from people directly
involved in store operations.”
The seminar presenters were Renee Shakour
(President, R.G. Shakour, Inc.), Erika Peel
Barnes (Director of Stores, Peel’s Salon
Services) and Martha Woodruff (Director of
Stores, Salon Concepts).
center for business education
Launched in 2006, the Center for Business
Education (CBE) provides ongoing,
executive-level education for beauty industry
professionals. The two introductory classes,
“Top Gun Sales Manager Training” and
“Store Leadership Boot Camp,” focus on
PBA’s distributor members. CBE educational
programs are unlike any other—taught by
successful peers with in-the-field experience
and focused on our industry’s issues.
Stay tuned for additional CBE offerings. Or
call 800-468-2274 (480-281-0424).
 Protecting your
Business from
Departing Employees
Tips on Restrictive Covenants
Nick and Jessica. Jen and Brad. J-Lo and Ben.
While tabloid headlines about these rocked
relationships can be viewed as meaningless
Hollywood gossip, they do confirm that if
anything in this life is certain, it’s that even
the most “picture-perfect” relationships can
go sour. Employers should take notice. When
hiring a new employee, many employers do not
think much about the newly hired employee’s
inevitable departure and the consequences
that may follow. This article discusses some
preventative steps your business can take to
protect itself and its confidential information.
The Need
for Restrictive Covenants
Absent an agreement containing restrictive
covenants, the legal restrictions on an
employee’s ability to take business and
information after leaving employment are
minimal. Thus, restrictive covenants in
employment agreements are an important
tool in protecting the customers, clients and
competitive information of client businesses
from being taken by a departing employee.
Non-competition covenants can prohibit
the employee from performing competitive
activities during employment and in a
specific geographic area of limited duration
after employment. A covenant against
competition is intended to protect the
employer’s investment in the employee and
restrain competition by former employees.
Such a provision can restrain the employee
from providing competitive products or
services to a client, regardless of who
initiates the discussion.
Non-solicitation covenants can restrict
employees from soliciting business from
clients or prospective clients with whom
they had contact after termination of their
employment. A covenant not to solicit
customers is designed to protect the
employer’s customer relationships and is
intended to limit the employee’s ability to
affirmatively solicit the employer’s clients in
an effort to provide competitive services.
Non-solicitation of employees
covenants restrict the employee from
recruiting employees of the employer
after termination of employment. In
various jurisdictions, covenants against
solicitation of employees have historically
been scrutinized less strictly than non-
competition covenants and non-solicitation
covenants.
www.probeautyassociation.org
PBA_summer06_nwslttr 6 5/22/06, 1:38 PM
Non-disclosure covenants can prohibit
the use of confidential information for any
purpose other than the advancement of
your business. Confidential information
is generally information related to your
business which does not constitute a trade
secret, but which you have a legitimate
business need to protect. The types of
information typically covered by these
agreements include client contacts,
preferences and pricing. Non-disclosure
agreements must also be reasonable in
duration to be enforceable. Provisions
requiring the return of company property
and information upon termination of
employment are essential to ensure that no
tangible information is taken. Companies
can also implement policies that prohibit
the misuse of company computers and
information systems and the unauthorized
deletion of data.
Choosing the Right Covenant
If the employer provides specialized training
or imparts knowledge of highly competitive,
technical or sensitive information to the
employee, the employer may be most
concerned with limiting competition by
the employee. Thus, a covenant against
competition may be more beneficial to the
employer. However, if the employee is primarily
involved in sales, or another position where he
does not receive such “special” information,
the employer may be most interested
in preserving the business relationships
with its customers. In this instance, a
covenant not to solicit may be sufficient.
Why not use both a covenant against
competition and covenant not to solicit?
While there are many instances in which doing
so make sense, using both is not always
necessary or advisable. Courts will enforce
restrictive covenants as long as they are
reasonable, meaning that they are no greater
than is required for the protection of the
employer, do not impose undue hardship on the
employee and are not injurious to the public. In
some states, if any portion of the covenant is
found to be unreasonable, the entire covenant
may be thrown out and declared void. Further,
despite their fundamental differences, some
courts look at covenants against competition
and solicitation as one. That is, even if the
two different covenants are incorporated into
two different provisions in the employment
agreement, if one covenant is declared
unenforceable, the other will automatically
fail, even if the other is not unreasonable.
What Should Be Included
in an Employment Agreement?
The employment agreement should clearly
identify the role the employee will play for the
employer. If the company has many different
types of positions, the employment agreement
should specifically describe the position the
employee is being hired for and if, during the
term of employment, the employee’s position
changes, a new employment agreement
should be prepared to reflect the changes.
Both covenants against competition and
solicitation require some variant of a territorial
restriction. The employee must be able to
ascertain, at the time he signs the agreement,
what restrictions will be placed upon him
when he departs. Once it is determined where
the employee will work, the employer can then
evaluate what restrictions are reasonable.
Does the employee work in one location?
If so, perhaps restricting post-employment
competition or solicitation using a radius
from a specified, fixed location, might be
appropriate. If the employee travels and
visits many different locations, then a regional
limitation, i.e. the states of Georgia, South
Carolina and Florida, may be appropriate. If
the employee switches to another office, or
acquires (or loses) certain territories, a new
employment agreement should be executed
that adjusts the restrictions to accurately
reflect where the employee truly works.
Otherwise, the employer risks having the
original covenants declared unenforceable.
One benefit of a covenant not to solicit is that,
in some circumstances, a specific territory is
not required. If the restriction on solicitation is
limited to those clients with whom the employee
had contact, and developed a business
relationship, a territorial restriction is not
required. That said, the covenant not to solicit
should be limited to those clients the employer
has a current or recent relationship with.
Conclusion
A new business relationship, like a personal
relationship, should be fostered by trust and
optimism. Even so, an employer would be
wise to put into employment agreements
certain covenants to protect itself in the event
the relationship ends. By carefully drafting
and implementing provisions that adequately
protect its legitimate business interests,
an employer can go a long way to protect
its customer base, resources and valuable
confidential information. When employees
know that they are bound by enforceable
provisions, they are less likely to challenge
them or risk a lawsuit.
Berman Fink Van Horn PC is a law firm
specializing in complex business transactions.
The firm is located in Atlanta, Georgia.
Disclaimer: This article is not a substitute for
legal advice from a qualified attorney licensed
in your state and familiar with your business.

Manufacturer Section
A Ietter from the leadership
As your Manufacturer Leadership Council
nears completion of its first half of 2006
activities, we are excited with our progress
to date. Throughout the last part of 2005 and
earlier this year, your council was actively
engaged in shaping the strategic direction
of the Professional Beauty Association (PBA)
with particular emphasis placed on the needs
and issues that we as manufacturers face
every day.
One of the themes that has become very
clear to me over the course of this important
process is that as diverse as our manufacturer
community is, our issues are far more similar
than they are different. This overriding thread
of commonality is a perfect scenario for the
likes of a trade association such as the PBA—
a place where its members can get involved,
share their collective voice and work for
proactive change on behalf of its members.
Industry Marketing
Excellence Honored
Recognizing innovation, creativity and overall
excellence in marketing for the professional
beauty industry, PBA honored its members at
the 10th annual ABBIES on February 4, 2006
at the Terrace Theater in Long Beach, CA.
Here are this year’s outstanding winners:
Hair Care
Best Product Packaging
Pureology Serious Color Care – Nanoworks
Restorative Hair Treatment
Best Print Advertisement in Industry
Publication
Ecru New York – Ecru New York 3-Page Ad
– Silk Texturizing Balm
Best Merchandising Display
IV Cosmeceuticals – IV Cosmeceuticals
Dispensary Stand
Skin Care
Best Product Packaging
DermaNew Inc. – Sensitive Skin Care
Collection
Best Print Advertisement in Industry
Publication
Dermalogica – Dermalogica Awareness
Campaign
Best Merchandising Display
DermaNew Inc. – DermaNew Prestige Retail
Display
Nail Care
Best Product Packaging
Entity Beauty – Entity Nail Couture Sculpting
Products
PBA_summer06_nwslttr 7 5/22/06, 1:38 PM
But in order for your council to continue to do
a thorough job of ensuring that PBA is actively
working on the most relevant issues on behalf
of the manufacturing community, we need you
help with three very important items:
1. We need you to be engaged and
follow what the PBA is doing.
2. We need to hear from you about
the issues that you feel are important.
3. We need you to spread the word about
membership and encourage our colleagues
to join the PBA!
These are three simple but critical tasks that
can have an enormous impact on the future
direction and success of PBA. Three simple
things that each of us as members of the
association have an obligation to fulfill. Three
simple things that, periodically, should only
take a few minutes of our time to complete.
Nail Care continued
Best Print Advertisement in Industry
Publication
Creative Nail Design – Raw Earth
SpaPedicure Campaign
Best Merchandising Display
OPI Products Inc. – Brights by OPI
Equipment & Tools
Best Product Packaging
Fromm International – Fromm Edge Ahead
Shears
Best Print Advertisement in Industry
Publication
Artizen – Artizen Digital Iron with Surround
Heating
Best Merchandising Display
The Cricket Company LLC – Cricket Store
Brush Baskets
Distributors
Best Distributor In-Salon Education Program
Raylon Corporation – C.A.M.P. Creating
Achievement through Mastering
Professional
Best Distributor Catalog
DePasquale Salon Systems – DePasquale
Salon Systems Magazine
Salons & Spas
Best Salon/Spa Corporate Image
Dermalogica – Dermalogica on Montana
Best Salon/Spa Retail Promotion
Salon Utopia – Teen Beauty Camp
Publications
Best Publication Design
Vance Publishing – Renew Magazine
7
In the hustle and bustle of our day-to-day
work, it’s easy to push anything PBA-related
to the bottom of the ‘to do’ list as a ‘get to it if
I can’ item in lieu of more important concerns.
But, in the end, what we are effectively doing
is pushing to the bottom of the list the issues
that we all need and want the collective
industry to address, via the PBA.
All of the PBA council members have invested
countless hours in our progress to date and
will continue to make the same commitment
throughout the course of their terms. Play your
part as a member and invest your minutes
often and wisely!
Here’s to ‘Three Simple Things’!
John Heffner
President,
MLC and Chair, GC
All Entrants
Best Industry Website
Creative Nail Design
– www.creativenaildesign.com
Best Professional Public
Relations Campaign
Creative Nail Design
– Nails in Fashion & Entertainment
Best Print Advertisement
in a Consumer Publication
OPI Products Inc. – Brights by OPI
Best Sales Promotion
BaBylissPRO – BaBylissPRO Breast Cancer
Awareness Program
ABBIES ICON Awards
PBA also honored three industry luminaries
with the ABBIES Icon Award:
Distribution
Michael Renzulli
Chairman, Sally Beauty Company
Salons/Spas
David Wagner
Owner, Juut Salonspa
Manufacturing
Paula Kent Meehan
Founder, Redken Laboratories and
Founder, Global Salon Business
Awards/B.E.S.T. Foundation
Learn more about ABBIES and see finalist
entries past and present at www.abbies.org.
 8
Co sm op ro f N o r t h A m e r ica 2 0 0 6 P re v ie w
PBA is gearing up for Cosmoprof North
America 2006 held July 16-18 at the Mandalay
Bay Convention Center in Las Vegas. CPNA
provides a high-quality business-to-business
experience for the global beauty industry. In
such a disjointed marketplace, Cosmoprof
North America provides a great opportunity
to do a year’s worth of business in just three
days. The entire beauty community will be
present, from manufacturers and distributors
to importers and exporters, to salon and spa
owners and more.
Last year, over 25,000 attendees viewed
over 700 companies in the course of 177,000
square feet of exhibit space. CPNA 2006
outlook shows a promising increase in
attendance and exhibitors.
As usual, CPNA will feature four pavilions
designed to meet the exclusive needs of
various segments of the industry: Pavilion A
– Cosmetics and Personal Care; Pavilion B –
Packaging, Contract Manufacturing and Private
the power
of beauty
www.probeautyassociation.org
PBA_summer06_nwslttr 8 5/22/06, 1:39 PM
Label; Pavilion C – Wellness and Spa; and
Pavilion D – Professional Hair, Nail and Tools.
Highlights for
Cosmoprof North America 2006:
Private meeting rooms. Private meeting
rooms will be available for your convenience-
a quiet, private place for you to get down to
business and interact on a more personal
basis with potential and existing clients. For
information on booking a private room, please
contact Eric Horn at 800.468.2274 x114, or
email eric@probeautyassociation.org
PBA Annual Business Forum. The forum
explores trends that are shaping the industry
and how the association is
responding. In particular,
you’ll discover how PBA is
protecting your interests
in Washington, DC. In the
forum’s finale, influential
Packaging, Contract Manufacturing & Private Label
business advisor Andrew Razeghi, author
of Hope: How Triumphant Leaders Create
the Future, addresses how great leaders
can introduce new ideas and expand their
businesses. The forum is complimentary
for PBA members. Non-members pay $25.
Includes coffee service.
Sponsorships. Its not too late to create
a buzz and attract more attention to your
booth! Sponsorships, directory ads and
signage opportunities are available. For
more information, please contact Eric Horn
at 800.468.2274 x114, or email eric@probea
utyassociation.org. You may also speak with
Ebony King at 800.468.2274 x145, ebony@pr
obeautyassociation.org.
After-Party. In celebration of the North
American Hairstyling Awards (NAHA) on
Sunday July 19, Cosmoprof and NAHA
attendees are invited to boogie the night away
at Studio 54 (located in the MGM Grand),
beginning at 10pm.
Cosmetics & Personal Care
Wellness & Spa
Professional Hair, Nail & Tools
Eric Z Horn, CMP
Show Director - CPNA
After 10 years of working along side the PBA
staff as Senior Director of Events, Eric Horn
has been promoted to Cosmoprof North
America’s Show Director. Eric Horn, along
with the newly appointed Ebony King, CPNA
Coordinator, now has full responsibility for
all sales of exhibit space, sponsorships and
advertisements, as well as management of
the trade show and budget maintenance.
Eric also acts as the main contact between
the Professional Beauty Association and
North American Beauty Events, the legal
partnership that runs Cosmoprof North
America. NABE is an equal partnership
between PBA, SoGeCos and Bologna Fieri,
the European companies that produce other
Cosmoprof events around the globe.
 TSA Section Symposium 11: TSA 10th Anniversary Survey

Get in the Game! A new three-part report presents the results

of TSA’s 10th Anniversary Survey. This
Letter from TSA’s Leadership nation-wide membership survey presents
January 20-23, 2007 a fascinating portrait of the size, scope and
In March TSA’s Leadership Council met in economic impact of member salons and
Chicago for our first full meeting of 2006. The San Antonio Marriott spas. Here are a few highlights:
meeting included a very exciting Government Rivercenter
Affairs update with Serena Chreky, VP of
Communications. PBA and TSA have plans to
San Antonio, Texas Price of a Hair Color
unleash a full time Government Affairs position $90 or more 18%
in the PBA Scottsdale office and a counterpart $70-89 22%
office in DC! This is a huge and bold move for $60-69 23%
our association. We shall pass our bill yet! $50-59 17%
less than $50 20%
John Galietti, VP of Education, led a very
informative, honest and creative discussion
on Symposium. He recapped what worked
Price of a Pedicure
and what didn’t work so well at Symposium Mark your calendars for TSA Symposium 11!
$50 or more 24%
2006. And he opened up dialogue for We have an active committee of TSA members
$45-49 25%
Symposium 2007. In addition to what John’s planning a strong education program for 2007.
$40-44 24%
2007 committee is already working on, the After this year’s 10th anniversary Ten Big Ideas
$35-39 21%
council gave him excellent feedback and program, Symposium 11 brings members
less than $35 6%
support. What he heard loud and clear was, back to basics with business-building
let’s stop talking about going back to basics breakouts, engaging industry speakers, plenty
and simply do it! It looks like Symposium of time for networking and a fun-filled finale. Price of a Facial
2007 will be full of real business solutions Kick off 2007 with insights and inspiration
and exciting industry icons. Have any ideas? to take your business to new heights! $90 or more 12%
Contact John at Johnxbc@aol.com. $75-89 27%
Remember, there’s more to San Antonio $65-74 33%
The council dug into the association’s than the Alamo! Symposium takes place $50-64 21%
strategic plan and hashed out what we in the midst of the vibrant “River Walk,” less than $50 7%
believe is important to our members. One a cobblestoned path bordering the San
project slated to start this year is the launch Antonio River as it winds its way through Compensation Programs Used
of intimate, topic specific workshops at the a lively district of European-style sidewalk
Scottsdale office. The workshops will only cafes, specialty boutiques and nightclubs. Commission & Salary Combination 46%
accommodate up to 20 participates. Other Expand your Symposium visit into a Commission Only 38%
projects include jump starting the Beacon family vacation with stops at San Antonio Salary Only 14%
committee and developing an industry DVD Sea World and Six Flags Fiesta Texas. Commission &
to be used to promote our association, our Or keep it grown-ups only with golf, spa Booth Rental Combination 2%
industry and our salons/spas. Anything sound treatments and two-stepping honkytonks.
interesting? Contact Laura Hubbard: Laura@ Retail Square Footage
probeautyassociation.org. She would love to
help you get involved. TSA Honors Outstanding Members 800 or more square feet (sq.f.) 13%
600-799 sq. f. 15%
Associations are funny things – as the salon During Symposium each year, TSA honors 400-599 sq. f. 18%
and spa leg of the industry, we have little or outstanding members who have made 300-399 sq. f. 13%
no experience working together under this a difference throughout the year. TSA’s 200-299 sq. f. 13%
umbrella. To some degree, it will always be leadership council nominates, and TSA 100-199 sq. f. 15%
a work in progress—adjustments, stumbles, members select the winners. Please join us in less than 100 sq. f. 13%
victories and celebrations weaved in all congratulating this year’s winners!
along the way. Frustrating, exciting and
Legal Agreements in Use
rewarding all at the same time! So how do
you benefit? One way is to get involved, Spirit of TSA: Charles Riser
Training/Education Agreement 53%
have a voice and work on specific projects.
Government Affairs: Nesbit Hatch Confidentiality Agreement 44%
The other way is just by being a member
Noncompetition Agreement 35%
– you benefit because our whole industry Charitable Outreach: Lisa Cochran
benefits. That’s one of the simple and
Manufacturer of the Year: Bumble & bumble The report is provided complimentary
elegant truths about a trade association.
to TSA members. Manufacturer and
Distributor of the Year: DePasquale distributor members may purchase the
Sasha Rash
Legislator of the Year: Rep. J.D. Hayworth (AZ) survey results for $250. Please contact
President,
Member Services at 800-468-2274 (480-
TSA Leadership Council
If you would like to suggest a nominee 281-0424) or email info@probeautyassoci
609-924-1188
for 2007, please call Member Services ation.org to order your copy.
sasharash@aol.com
at 800-468-2274 (480-281-0424) or
email info@probeautyassociation.org.

PBA_summer06_nwslttr 9 5/22/06, 1:39 PM

 10 Tips
for Salon Retailing
1. Retail several different product
brand lines. Know what each brand
stands for and how it differentiates
itself. Each brand must have a
different reason for being in the salon.
Inventory cost is too expensive for
another “me-too” brand.
2. Independent salons can beat chain
salons at the retail game. Stylists and
front desk coordinators should always
be educating clients with product
knowledge. Your salon staff becomes
a valuable resource to the client and
gives your salon the advantage.
3. Build distributor and manufacturer
alliances. Start with your sales rep
but include their senior management,
education and business development
managers. Develop a team
relationship to grow your business.
Plan how your salon can build their
business and they will want to help
you grow—a win-win situation.
4. Turn off-shelf display space into
numbers. Use your secondary
display space to highlight seasonal
or new products. Make it attractive
but not so much that the clients don’t
want to disturb the perfectly placed
products. Change the off-shelf
display products every six to eight
weeks to coincide with your clients’
visits insuring that what they see is
always fresh.
5. Increase retail product sales with
special programs. For a major
program, put all products from one
brand on sale. You want the selection
broad enough to draw client attention
by presenting a variety of products.
Remember, you’re trying to stimulate
impulse purchases. The sale price
should be at least 30% off for client
impact. For a mid-size program,
consider a multiple-purchase event,
i.e. “Buy the Shampoo, Get the
www.probeautyassociation.org
PBA_summer06_nwslttr 10
Conditioner for 50% Off!” Client
savings perception is strong because
of the 50% discount. The salon’s
financial reduction is actually 25%
since two products are sold—a
shampoo and a conditioner.
6. Distributor % off promotions
– to buy or not to buy? Buy in on
top selling products. Top selling
products will sell through in a short
period of time and be worth the
extra purchase. Don’t over spend
on ancillary products. They don’t
turn quickly enough to warrant the
additional expenditure.
7. Keep an eye on your retail inventory.
Analyze your monthly sell-through
every quarter. Decide how many
weeks of inventory you want to keep.
You may consider three weeks of
inventory since it provides a cushion
if sales increase in a particular week.
Adjust the “order below” trigger figure
to match your sell-through and desired
weeks of inventory. For example, if
your goal is three weeks of inventory
on a product and the product sells 6
pieces every 4 weeks, that yields 1.5
pieces per week. You should keep
either four or five pieces of product on
the shelf (1.5 x 3 = 4.5).
8. Top selling retail products are the
priority. Know your top 10 to 15
products by brand. Always keep
them in stock. Consider increasing
these to four weeks of inventory if
weekly sales continually fluctuate.
5/22/06, 1:39 PM
9. Keep up with the trends. To keep up
on emerging trends in hairstyles and
seasonal looks, talk to your stylists and
read the beauty and trade magazines.
Make sure the salon has that retail
product to meet that trend or get that
style. Don’t forget that trends change,
so don’t overstock your shelves. Be
cautiously optimistic.
10. If you carry multiple brand lines,
share of shelf equals brand share
of volume. Calculate the percentage
of space each brand has in the
salon. For example, Brand A has 4
linear feet and total retail space is 40
linear feet. So Brand A is taking up
10% of the total retail space. Then
calculate the percentage of sales
volume each brand sells in the salon.
For example, Brand A’s annual retail
volume is $5,000 and total volume of
all retail products is $100,000. Brand
A has a 5% brand share of volume.
Brand A is over-spaced based on
its volume contribution. Consider
reducing its space by eliminating
non-performing products of multiple
sizes (8.5 oz. and 16 oz) of the same
product. Give the extra space to the
brands that have a larger share of
volume to its share of shelf.
TSA member Ed Simon is the owner of
Mystique Hair & Skin Salon in Princeton,
New Jersey. A full-service salon with day
spa services, Mystique sells Aveda, Alterna,
Redken, Matrix and Nioxin products. Prior
to becoming a salon owner, Simon spent
17 years in trade marketing and sales
management positions at Revlon, L’Oreal
and Del Labs.

Member
Profile
Jim Markham
Founder and CEO, Pureology
PBA Manufacturer Member
Jim Markham started out in the industry as a
championship barber and stylist to stars such
as Paul Newman and Johnny Carson. After
Jay Sebring was killed in the Manson murders,
Markham took over Sebring Products. With a
passion for innovative ingredients, Markham
went on to found Markham Products and
ABBA Pure and Natural Haircare. In 1997, he
sold ABBA and considered retirement. But he
couldn’t resist the temptation to get back in
the game…
1. How did Pureology come about?
We sold ABBA in 1997, and I wasn’t sure that
I’d come back. Then at Cosmoprof, I saw
there was a color boom going on, but nobody
was doing anything in terms of maintenance.
Stylists and colorists didn’t have anything that
really enhanced their color. So I went looking
for new technology and was surprised to find
there was a lot available. But it was expensive.
When you develop superior products with
performance you can notice after one
application, price is not the issue. It’s all about
value, about performance. At Pureology, we
really focus on R&D and product performance.
Packaging sells it once. Performance sells it
twice. We’ve really created something unique,
started a whole new category. We are the
market leader in the color care category.
2. You are known for innovative
products. What makes your business
innovative as well?
The biggest point of difference is product
performance. I’m a non-degree chemist
and a member of the Society of Cosmetic
Chemists. I understand the idiosyncrasies
of product development. I work directly with
the fragrance houses. I love to talk to the top
ingredient manufacturers. It’s fun for me. I love
to build a better mousetrap.
Others come up with the product idea and
packaging and then just put a recipe in. We do
the opposite. We develop the product first. If it
doesn’t pass the performance test, it doesn’t
get to fragrancing and beyond. You might work
on a product for 6 months and find that you
can’t make it any better than anyone else—
which means there is no reason to bring it out.
PBA_summer06_nwslttr 11
And we are one of best managed companies
in the business. I have a tremendous team.
Pay better people better money and you’ll
get better results. No other company is as
efficient. We are never back ordered. We get
our stuff out on time. Back orders kill most
companies quicker than anything. That’s the
unforgivable sin, to have any back orders.
3. How does your status as a privately
held company influence the way you do
business?
It appears to me to be very limiting for these
big companies to try to compete with us.
People ask me, how do you compete with
the bigger companies? My question is, how
do they compete with me? We’re faster, have
better innovation, spend money on product
performance, can turn on a dime and spend a
huge amount on sampling. We can be nimble
and fast and respond to needs immediately
without a lot of accountability.
4. What’s next for Pureology?
We have seven new products this year.
The last one was Nanoworks, which was a
phenomenal success, the most successful
product I’ve ever come out with and the
highest price. We’re launching three to four
products by July or August and a couple
more for year end. It truly is a “what’s-new”
business. You have to provide something
that’s new, and it has to be superior. And
we’re going international mid-year or maybe
a little sooner. We have seven distributors
trying to get trademarks completed and
get products registered from the packaging
point of view. We’re heading into the EU,
Russia, Brazil, Costa Rica, Honduras,
Guatamela and beyond.
5. At a time when the manufacturer-
distributor relationship can seem quite
strained, Pureology has strong relations
with its distributor partners.
We work with distributors and we’re going to
stay with distributors. It is the only way I’ve
ever done it and the only way I’ll ever do it.
We see a need for distributors to assist salons
to help them grow their businesses. If a lot of
companies go direct, it undermines the stylists
and colorists. They get worse service and
worse education than ever before. Every time I
see a company go direct, they immediately go
into backorder, they move, they fire everyone
that made them successful. Going direct to
me is silly. Penny wise and dollar foolish.
6. You acquired Alterna in April
2005. Tell us about what you’ve
accomplished so far.
We have eliminated all back orders, gotten
rid of dead inventory and made nice
improvements in products that needed it.
We’re coming out with new products and
5/22/06, 1:39 PM
11
re-launching stuff that was really successful
in past but that somehow got put aside.
We have started an ad program and a PR
program. The company was profitable for the
first time ever last year. And it looks great—
we see nothing but upside for it. But the real
rocket ship right now is Pureology.
7. How do you see the prestige/luxury
segment of the professional beauty
industry growing?
The luxury category is booming. There is no
let up for quality-first products. How do you
think BMW is going to continue to grow?
They’re the most profitable, and they sell
quality luxury products. To learn about the
emerging luxury consumer, I recommend
the book “Trading Up.” It tells you about that
consumer and why they will pay more money
for quality and value. What we sell as stylists,
manufacturers and distributors is quality
service and quality products. A superior
mousetrap brings a superior price.
8. What advice would you give small-
scale beauty manufacturers looking to
grow their businesses?
Identify your niche—keep it narrow and
focused. With us, we’re only for color-treated
hair and we appeal to high-end colorists and
salon owners. A narrower focus offers wider
potential. Others try to be all things to all
people. They focus on defensive marketing
as opposed to offensive marketing. Instead,
identify a specific niche and make sure you
have a superior product.
9. What impact would you like
to have on the industry?
My main intent, being a stylist originally, is
to really show stylists and colorists that they
can have a better product than is sold retail.
Everybody says that they want upgrade the
industry’s image, but how do they do that?
We charge two to three times the price of
normal products—and that means that stylists
make two to three times more money. Stylists
are more successful with our products, which
enhances the quality of their life and enhances
their image. Stylists and colorists have had
average products for so many years. They
appreciate the quality of Pureology.
10. Why are you a member of the
Professional Beauty Association?
I want to be more involved in impacting
the industry. There is an old saying—in
order to get more, you have to give more.
We’ve got a lot, we’ve been very fortunate
and we want to give back as much as
possible. I think that PBA is doing that.
As manufacturers, we have to participate
more. I didn’t do that as much when I was
younger, but now I have the opportunity and
I’m going to make the most of it.
 Benefit Highlight
Legal Ease
Are your managers entitled to overtime
compensation? What kinds of job actions can
get your company sued? Did you know that
employers can be held liable for customer
harassment? Can you really enforce that
non-compete agreement? Are you aware of
a recent federal court decision that might
change the way you hire?
Professional Beauty Association
15825 North 71st Street, Suite 100
Scottsdale, Arizona 85254
www.probeautyassociation.org
PBA_summer06_nwslttr 12
What if you could get answers to all of
these questions and more for less than $9 Beacon:
a month? PBA is proud to have a preferred
program for PBA members to do just that!
The Next Generation
One of the country’s top employment law
firms, PBA’s endorsed provider was once
of Salon Professionals
again honored as one of the most widely
respected labor and employment law firms
“Beacon was a true success! It was the most
by Chamber’s USA Guide to America’s Best
exciting event I have attended in my life, and
Business Lawyers. With a practice exclusive
it meant the world to me.” – Jon Hendrickson,
to labor and employment law on behalf of
Beacon student 2005
management, the focus is on management
rights and the actions that management can
Do you know a promising future salon
take, rather than those they can’t. Providing
professional? Encourage them to take part
prompt, high-quality, creative legal services
in Beacon! The Beacon program helps
and solutions, their philosophy is that labor
cosmetology students gain exposure to the
and employment counsel is a collaborative
business side of salon work. The program,
process with their clients, designed to meet
which brings outstanding students to TSA’s
their business objectives.
Symposium in January, strives to inform,
enlighten and inspire the next generation
Once you pay the $100 fee to enroll, you can
of salon professionals. It also provides TSA
phone as often as necessary for guidance on
members with a great opportunity to meet
wage and hour compliance, hiring and firing,
potential new hires.
employee benefits and more. That’s less than
$9 a month! For a separate fee, the firm also
To request a Beacon entry form or for more
reviews handbooks and applications, defends
information on Beacon, please contact Laura
against discrimination charges and more.
Hubbard at 800-468-2274 x126 or email
laura@probeautyassociation.org.
5/22/06, 1:39 PM