Spa Business Builds as Economy Dwindles

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Spas clipped as clients close wallets

In Urbana, new spas such as City Magnolia Day Spa in the Turning Point Center seem to be bucking the trend. The shop’s co-owners, Aubrey Rogers and her mother, Beth Mackey, have noted 40 percent revenue increases each month since the shop’s opening in 2007, Rogers said. In October, revenues increased 56 percent, but Rogers acknowledged that much of the growth stems from the spa’s client base starting from scratch.

“The clients we see are looking for ways to have healthy stress relief,” Rogers said. “We weren’t sure what was going to happen with the downturn in the economy. We were predicting only 30 percent growth. … One client said it best: ‘I have so many things to do but I just need to come in for an hour and shut out the noise.'”

Rogers acknowledges that much of her spa’s rapid growth stems from its newness, starting off with no clients. The spa was one of several in the county to agree to honor gift certificates from the Golden Orchid Salon and Spa, which closed abruptly last month.

“I wanted to preserve the reputation of our industry and [instill] confidence in our customers,” Rogers said.

With two locations in Everedy Square and Shab Row in Frederick, Golden Orchid closed Sept. 22 after six years downtown. Owner Yvette Shirey, who could not be reached for comment, did cite reasons for the closure but said on the Golden Orchid Web site that “financial situations” prevented her from refunding money for gift certificates.

“It is my hope that people will try to understand … that there must be circumstances beyond my control that brought us to today,” the Ijamsville woman wrote. “I truly regret that I was unable to remain in business and honor these obligations.”

Daisy Price, a former Golden Orchid employee, opened Daisy’s Salon and Body Boutique at one of the former Golden Orchid locations. Price’s staff of 24 include hires from both the Golden Orchid and PeriSpa on W. Patrick Street, which also folded in recent months. Price said she had always wanted to open a spa and did not expect an opportunity during an economic downturn.

“I really hope everyone does well in this industry. I wish them all the best,” Price said. “I think all the salons need to come together at this time. I hope nobody else closes. It’s important to understand that salons employ a lot of people.”

Like City Magnolia Day Spa, Renaissance Salon & Spa on Buckeystown Pike has also been drawing former Golden Orchid customers, as co-owners Tami Anderson, Jennifer O’Donnell and Sharon Rose have been honoring a portion of the closed spa’s gift certificate value.

“It’s slowed down, but our clients have been very loyal to us,” Anderson said. “We’re trying to answer to the economy as best we can.”

With more focus on marketing, Renaissance is planning to beef up its incentives in the next few months to include rewards for referrals, repeat business and multiple services, Anderson said. On the outskirts of Frederick, Lynn Thai opened a second Sanctuary Salon and Spa on Thomas Johnson Drive this month after successfully running the Sanctuary Salon on the Golden Mile in Frederick for more than 10 years.

Compared with last year, Sanctuary’s revenues for 2008 have been off by 40 percent to 50 percent, Thai said. While she has struggled to keep her regular newspaper advertising, she plans to cut back on those costs. She has already begun cleaning her salons herself to save on janitorial services and is banking on her customers “who have money” to keep the business going.

“Right now, yes, I’m suffering,” Thai said. “It is empty. It’s hurting dramatically. I’m trying to hang on as long as I can. It’s getting worse, and it’s not only me. It’s bad. It’s really bad.”

U.S. spas

-From July 2006 to June 2007, the industry grew 24 percent from 14,600 spas to 18,100 spas.

-As of June 2007, there were more than 32 million active spa-goers and one in four Americans had been to a spa.

-The industry generated $10.9 billion in revenue in 2007, up from $7.0 billion in 2003.

-In June, spas employed 303,700: 143,200 full-time employees, 112,000 part-time employees and 48,500 contract employees.

Source: The International Spa Association

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