Day Spas Massage Their Way Into Booming New Business
By: Jennifer Bott - The Detroit Free Press

Her family opposed her. Bankers brazenly laughed in her face. Yet Nadwa Yono, 37, didn't flinch.

After finally getting a loan, Yono opened a 5,200-square-foot salon and day spa in Novi Town Center. But company sales totaled more than $1 million the first year. Salone Nadwa and Day Spa, which last month celebrated its fifth anniversary, expects 1999 revenue of at least $2.5 million.

Day spas are an industry that emerged in 1992 and "blew up" with popularity in 1995, said Hannelore Leavy, executive director and founder of The Day Spa Association in New Jersey. Though the dollar-and-cents market value is not yet available, industry experts contend that day spas are the fastest-growing segment of the beauty industry.

"People no longer want just to get their hair and nails done," Leavy said. "They want facials, herbal wraps, therapeutic massages and more."

Wendy Lewis, beauty consultant and writer for WLBeautyWATCH magazine in New York, said the spa industry has evolved from the overnight destination and hotel/resort spas to day spas, which offer more than just massages and facials. They also offer stone therapies, paraffin-wax foot treatments, laser hair removal, cellulite treatment, acupressure and many other services.

On average, a full day of pampering costs between $350 and $400. Services are designed for special occasions and both genders. There are bridal party services, prenatal massages, gentlemen's specials and so on.

"It's a booming business, and it's not just relegated to Palm Springs anymore," Lewis said.

Day Spa's Leavy said there are nearly 450 day spas in the country. She said the market could handle about 1,500 more day spas.

Eight-five percent of day-spa clients are female, and 47 percent are between the ages of 34 and 52, according to a study by Kentucky-based International Spa Association Inc. Also, many spa-goers are middle to upper-income.

Emile Salon and Spa in Beverly Hills markets to athletes and business people as well.

Emile's opened 56 years ago as a salon but in 1996 rebuilt and opened a full-service day spa, and Rula Joseph, an owner and stylist at Emile's. She said clients were getting their hair done at Emile's but going elsewhere for spa services. "That was the icing on the cake," she said. She said the spa has created a lot of new business. Emile's reports yearly revenue of more than $1 million.

Getting started isn't easy. Yono of Salone Nadwa with her husband Eric Breda went to nearly every bank in metro Detroit before she was able to get a loan.

"Spa owners are not business people, they are service people," Leavy said. "They go to the bank and the bank is doubtful about the market. But there is money to be made. It's expanding. It's a good market to get into."

After getting a loan from Franklin Bank N.A., Salone Nadwa opened with eight employees and no customers. "I struggled for the first five months," Yono said.

By the end of the first year in business, it posted revenue of $1 million in 1995. The salon/spa generated revenue of $2 million in 1998. Now Salone Nadwa has 750 to 1,250 clients each week and is projecting revenue in excess of $2.5 million for 1999.

Yono plans to expand the spa by 1,200 square feet early next year to allow for more corporate meetings. Frequently organizations such as pharmaceutical companies hold meetings with spa services for their clients and employees, she said. Also, Yono wants to open a 7,000- to 8,000-square-foot salon and day spa in Rochester in the next year.

Retailing also plays a major role in the day spa industry. Many spas sell specialty products for hair, hands and feet, makeup, skin texturing, anti-aging, vitamins, mineral treatments, cellulite treatments, and more.

Jill Kohler, managing director of The Salon Association in Arizona, said retailing is an extension of the customer service spa owners should provide. She said 11 to 12 percent of spa revenue should be retail.

Yono said retail at Salone Nadwa is 19 to 20 percent of revenue.

Spa-goers demand changes as the industry changes, Lewis said. "Spa-goers today are conscious about health, image, and nutrition. A day spa needs a comprehensive program. It's not an easy business."