Sammy Beauty Supply

Sammy Beauty Supply – Puerto Rico is a beauty supply company. It is involved in supplying and installing beauty supply items for salons. It also sells beauty supplies in retail format. Its geographic segments include the United States and Canada. As of December 31, 2016, the company operated over 895 stores and franchises over 255 beauty supply stores, which are primarily located in shopping centers, strip malls, and other lifestyle retail venues. It operates primarily in the southwestern, southeastern, mid-Atlantic, and northeastern United States and the southwestern, southeastern, mid-Atlantic, and northeastern Canada. The company serves the commercial and residential beauty supply industry. It operates primarily under the Sammy Beauty Supply Inc, Super Fresh, Beauty Advance, American Beauty, and Professional Beauty Supply brand names. The company was founded on July 23, 1990 and is headquartered in Puerto Rico.

History

The company was basically founded in 1989 by Pedro H. Rey III in San Juan, Puerto Rico. The company’s first location was an inside corner of a building on Calle Tiuna, known as Beauty Supreme. At this location, the company used two U-Haul trucks to hold inventory and sell beauty supplies. In 1990, this location opened its first store in Puerto Rico on Calle Última Ciudad. The company later opened additional stores across Puerto Rico in 1992, 1996, 2002, 2003, 2005, 2007, and 2008. In September 2000, it opened its first Sam’s Club location in Puerto Rico, located in San Juan.

Direct Selling and Beauty Value Proposition

Sammy’s Beauty Supply primarily sells beauty supplies, including beauty products, hair color and care products, makeup and nail care products, fragrances, and other beauty items. Beauty products can be found in the center of the store and can also be found in other areas of the store. Beauty and personal care products are displayed on shelves, stacked in boxes, and in racks. Beauty products also include hair coloring and care products, makeup and nail care products, fragrances, and other beauty items.

The First Third

In 2008, the company made an investment in PPM and the PPM Group, where Sammy Beauty Supply increased its ownership stake to 73.8% by the end of the year. During the same year, PPM Group, the parent company of Sammy Beauty Supply Inc., announced a strategic joint venture with Saks Fifth Avenue, Inc., a publicly traded company, which closed in 2010. The joint venture comprised 15 Saks Fifth Avenue and Saks Off 5th stores in Puerto Rico and the U.S. Virgin Islands, which will be operated by Sammy Beauty Supply. The first location opened in San Juan, Puerto Rico in 2011, and all stores opened by the end of 2012. In January 2013, Sammy announced that the company had signed a franchise agreement with Denny’s Restaurants, Inc., for 80 restaurants in Puerto Rico. Sammy will sell and install coffee machines.

In October 2014, Sammy announced that it had acquired the Boston Proper chain of bars and restaurants, which operated 40 locations across Boston. The company also announced that it would purchase Gold Coast Realty Ltd., a subsidiary of PPM Group, in July 2015. This added 22 locations to Sammy’s footprint. Sammy’s largest acquisition to date is the purchase of Boots & Cream, a manufacturer of non-prescription beauty products, in April 2018. The acquisition will allow Sammy to expand its product line and provide its customers with a wider variety of national brands, as well as private label products. In November 2017, Sammy announced that its CEO, Pedro H. Rey III, had purchased a majority stake in PPM, leading to the change of the name to Sammy Beauty Supply Puerto Rico Inc.

Growth

  • In 2014, Sammy opened its doors to customers in the U.S. Virgin Islands and the Caribbean, and in December 2014, Sammy opened its first Sam’s Club location in Puerto Rico.
  • In June 2016, Sammy opened a second Sam’s Club in San Juan, expanding its footprint to another three stores.
  • In December 2016, Sammy Beauty Supply opened its first Kohl’s department store location in San Juan.
  • In June 2017, Sammy opened its second Denny’s restaurant location in Puerto Rico.
  • In August 2017, Sammy Beauty Supply Puerto Rico began construction of its first military veteran-owned business, The Original Skillet.
  • In January 2018, Sammy Beauty Supply opened its first SunTrust Bank location in the Caribbean, in San Juan.
  • In April 2018, Sammy opened its first Dierks Bentley’s Whiskey Row location in San Juan, featuring a unique, indoor-outdoor bar.
  • In July 2018, Sammy Beauty Supply announced plans to expand into New York. The new store is slated to open in the fall of 2018, expanding the chain’s presence on the East Coast.

Competition

The Sammy Beauty Supply is a company competes with independent and national cosmetic and beauty suppliers that operate through retail and wholesale channels. In addition to the PPM and Saks Fifth Avenue, the company is also competing against national retailers such as Ultra Beauty, Macy’s, and Walgreens.

Geographical Reach

The company operates all its stores throughout the Caribbean and Puerto Rico. As of February 2021, there were 44 stores located in Puerto Rico, 24 in the U.S. Virgin Islands, and 11 in the Dominican Republic. The stores are in popular shopping centers across the territories.

Risks

The company’s risks include continuing operations, commodity cost increases, competitive industry, and short-term uncertainty.

Capitalization

As of March 31, 2018, the company “Sammy Beauty Supply” had cash and cash equivalents of $7.5 million and total debt of $3.9 million. The outstanding principal on its debt was $3.7 million. The company’s working capital was $36.3 million as of March 31, 2018, which consists of $15.4 million of cash and cash equivalents and $18.1 millions of inventory.

Conclusion

Overall, we believe that the company Sammy’s Beauty Supply Puerto Rico has a solid business model that includes high barriers to entry due to its strong brand and geographical reach. Furthermore, the company is currently benefiting from the growth of the retail industry, as the demand for salon products is increasing among salon and spa clients. Moreover, the company’s geographical reach will help it generate higher sales. All these factors will help the company continue to grow its sales and earnings in the next 12 months, as it opens more new stores and remodels the current ones.

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