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Spa Sydell GA Spas Files for Bankruptcy

September 29th, 2009

spa sydell atlanta ga day spas

Spa Sydell, a purveyor of pampering in metro Atlanta for more than a quarter-century, has filed for Chapter 11 bankruptcy.

The six-spa chain, founded by Sydell and Arthur Harris, will continue to operate, the company said, and it will sell and honor its popular gift certificates. It is adding a seventh location in Roswell.

In its 117-page bankruptcy petition, the company listed $4.3 million in debts and $5 million in assets. The filing shows a decline in gross income to $16.2 million in 2008 from $19.1 million in 2007. In 2009, year-to-date sales were $9.3 million through May.

Atlanta bankruptcy attorney Scott Riddle said spending on luxury items such as spa treatments has fallen in the recession.

“Due to the current economic times and for the continued future of Spa Sydell, it was necessary for us to take this proactive step,” CEO Richard Harris said.

Bankruptcy would allow the company to reorganize financially and to renegotiate its leases.

The chain features services such as massage, facials, manicures, microdermabrasion and reflexology. It has garnered attention locally over the years, in part, through the high profile of Sydell Harris.

The company started with a single location in Buckhead in 1982 and has changed names and expanded since. It has about 350 employees.

The bankruptcy filing lists $2.25 million in unsecured debt. Of that, $743,000 is owed on leases for the six retail locations. Hundreds of unsecured creditors are listed, mostly for trade debt, from radio station and newspaper advertising to business cards, shipping and catering.

The only secured creditor listed is BB&T, with a $1.8 million loan.

The company also owes the Georgia Department of Revenue more than $200,000.
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A Spavelous Recommendation is if you have a gift certificate from any of these locations USE IT NOW!  In addition, we recommend that you do not purchase and new gift certificates from these locations.  If you want, you should purchase a national spa gift certificate that can be used at many different spas in the event of closure.  The Spavelous Spa gift card may be used at any spa or salon that accepts VISA.

Georgia Spas, Spa Bankruptcy

Erika Mangrum Iatria Spa and Health Center of Raleigh NC Closed

September 29th, 2009

Mangrum-Iatria-Spa-Closed

The owners of Iatria Spa and Health Center of Raleigh have pulled the final plug on the business and filed for Chapter 7 bankruptcy liquidation.

HFM Spa Management Corp., the parent company of Iatria’s five business entities, filed a voluntary petition with the Eastern District of North Carolina’s U.S. Bankruptcy Court on Sept. 8.

The petition lists more than 100 creditors, many of whom were individuals who had pre-paid for services. Iatria was a full-service, medically oriented spa that offered services like chiropractic care, acupuncture and naturopathic medicine, as well as Botox injections and mesotherapy. The bankruptcy petition listed more than $500,000 in liabilities and less than $100,000 in remaining assets.

Iatria co-owners Erika Mangrum and David Mangrum opened the first location in 1999. They closed the downtown Raleigh location in 2008 and closed the remaining three locations – including the flagship location on Creedmoor Road in north Raleigh, as well as smaller locations at Wakefield and in Cary – on Aug. 31, 2009.

Terri L. Gardner, a lawyer with Nelson Mullins Riley & Scarborough LLP in Raleigh, is representing HFM Spa Management Corp. in the bankruptcy proceedings.

Joseph N. Callaway, a lawyer with Battle, Winslow, Scott & Wiley PA of Rocky Mount has been appointed by the court as the interim trustee for the case.

Full Article and Credits

Now more than ever, if you want to buy a Spa Gift Certificate, you should only purchase a Spavelous Spa Gift Card. It is accepted at any spa or salon that accepts VISA. You never have to worry about a spa business closing.

Iatria was a well-known, reputable spa that had been around for ten years. The Greenhouse was a destination spa icon since 1965. So you can’t necessarily count on reputation or longevity to make sure your gift certificate will be honored when the time comes.

The good news is that two Raleigh businesses say they will honor the gift certificates. R.O.I. Salon in Raleigh (which does hair, skin and nails) has announced it will honor the gift certificates dollar for dollar. And the owners of Synergy Spa, Anna Porrazzo and Dave Churchill, say “we will work with you to redeem these with us; we only ask you give us some time so that we can figure out a way to best accommodate everyone.”

MedSpa, Medical Spa, Spa Bankruptcy, Spa Closing, Spa Closings

Economy’s Impact on the Spa Industry

February 25th, 2009

massage-trainingStarting in the 1990s, you couldn’t swing a plush white towel without hitting a client in a “day spa” that had once been known simply as a salon.

Spas picked up way more steam in the late 1990s and beyond, when treating herself to a facial, massage and manicure/pedicure (now simply known as a mani/pedi) was simply what a woman did.

People worked hard and soon seemed to consider pampering mandatory as a reward. Facials, once something you only got on vacation or on a cruise, became, for some, a monthly must.

 

Consider this: According to Ohio’s Board of Cosmetology, the number of licensed estheticians in Ohio (they are permitted to do facials, skin treatments and waxing) grew from 453 in 1998 to 3,204 in 2008, a jump of 607 percent.

But just as analysts expect 2009 to bring retail store closings, some local day-spa owners expect their industry to shake out as well, with smaller spas either closing or salons cutting back on the spa services they offer and going back to their bread-and-butter haircut and color services.

Reps from beauty-supply houses are telling their customers — salon owners — that their sales to salon/day spas are dipping, noticeably, especially for nonhair-related products.

Like many working women, Tara Templeman, an events planner who lives in South Euclid, is considering financial priorities.

“I consider the economy, and my spending, and there’s some shakiness,” she says. “I definitely still make the same number of haircut and brow-wax appointments, but I’ve cut back on facials, manis and pedis.”

Frank Alvarez, of the Markfrank salon chain, has been in the business for 50 years, so he knows something about economic ups and downs.

He remembers the days when the “spas” were Helen Milner on Cleveland’s Shaker Square and Dominic’s in Beachwood — places patronized by wealthier women — and considers the more recent past, when every corner seemed to have a day spa.

He predicts a shakeout this year.

“I’ll tell you, this is the first time I’ve really see the beauty business affected,” says Alvarez, who, along with his family, owns the two Markfrank salons in eastern suburbs.

Hair salons have long been dubbed recession-proof. People, especially women, likely will always want to have their hair cut and usually colored, too.

But in the past couple of decades, beauty salons began offering facials, waxing, massages, body wraps/exfoliation, pedicures and manicures. They had to add space to provide most of these services, which didn’t have as quick a turnaround as a small haircut station.

That meant less income per square foot.

Yet “it was a big trend, and people didn’t want to be the last ones to get on the boat,” says John DiJulius, owner of four John Roberts salons, two of which also have spas (Mayfield Heights and Solon).

An explosion of spa additions ensued, with supply fueling more demand.

Consider Charles Scott Salon and Spa, with salon-day spa locations in Rocky River and Westlake. In 1996, the Rocky River location had –in addition to a staff of hairstylists — three estheticians, one massotherapist, four nail technicians, one electrologist and a spa manager, says owner Chaz Henline. Today, it’s got six estheticians, five massotherapists, eight nail technicians, the same electrologist and the spa manager.

Henline opened a Westlake location as a full-service salon in 1993. “We had one esthetician, three nail techs, no massotherapists and no spa manager,” he says.

That location also evolved into a day spa in 2004 and now employs four estheticians, four massotherapists and five nail techs.

Henline took the new kind of business seriously, building dedicated areas to create the sanctuary-environment such services require.

One area in which spas likely won’t see a big drop is waxing. Until the 1990s, salons used to do a little brow and upper lip waxing, sure, but bikini waxes were an exotic oddity. Now, every spa will vouch for how that portion of their business has grown — which is why there are so many licensed estheticians in Ohio now.

Nicole Flesher, spa director at John Roberts, says: “Waxing has skyrocketed. The numbers continue to go up still, every year. People never used to get Brazilians, and now I might do six or eight a day maybe 10 a day in summer.”

Kelli Hosso, spa manager for Charles Scott, concurs. “Body and face waxing is very steady. People are not willing to give that up,” she says.

Some spas are using creative means to try to head off dips in other services, including massages. Many businesses, such as Charles Scott and the Five Seasons day spa in Westlake, have created “massage clubs,” which give people discounts if they commit to several appointments.

Still, in dire times, people do cut back on things that aren’t necessities, and they reconsider what necessities are.

Plus, says Alvarez, “You have so many day spas now. The spa thing is overplayed, it’s saturated.”

Still, he and DiJulius say the spa/salon industry’s ace in the hole is the personal relationships people develop with their hairstylists — and estheticians, manicurists or massotherapists.

“So many things that used to provide human contact — going to the bank, or the video store — you can do online now,” says DiJulius. “We’re one of the last legal ways to pay someone to touch you — someone you trust.”

As Alvarez says, “You continue to give the best service you can, you’re nice to people.

“And you wait it out.”  

Full Article and Credits

Spa Bankruptcy, Spa Business, Spa Closing, Spa Closings, Spa Finder, Spa Jobs, Spa Professionals, Spa Profits, Spa Trends

Affordable Spas to Relax and Reduce Stress

February 9th, 2009

relax-and-reduce-stress-spasThe spa industry has been stressed by the recession—which is great news for your aching wallet.

It took ten straight days of shoveling snow and the resulting back spasms for Hyde Park resident Elizabeth Lockwood to finally decide enough was enough: She got online and found a spa she could visit for a massage while seeing relatives over the holidays. For Old Town resident Kate Bongiovanni, it took a brutally active autumn of competing in endurance events—an Ironman and two marathons—to admit her battered body needed a sports massage, recession or no recession. “I’m not going for relaxation but for working out the kinks in my shoulders, hips and legs from athletic overuse,” she says. “It was really all about my body breaking down and having to limp from one place to another that prompted me to go.”

What these women—and many other Chicagoans—have in common is that in these difficult economic times they need a compelling reason to spend money at a spa. “Instead of deciding to treat themselves, it’s more of a ‘I can’t move my neck because I can’t sleep because I’m so stressed out’–necessity,” says Stacy Levy, spa director at exhale in the Gold Coast.

At exhale, sales are about 20 percent below projections, and the hardest-hit services are the ones clients consider indulgences, such as body scrubs and facials. But maintenance treatments—like waxing, manicures and pedicures—are down, too. “Our regulars are waiting longer between appointments,” says Stephanie Gerard, publicity coordinator for Bliss Spa. “Somebody who used to come for a monthly facial now comes every two months. For nail care, if they used to come every two weeks, now they do it once a month.” Lynne McNees, president of the International Spa Association (ISPA), which certifies spas and tracks industry trends, says, “People are still going to spas—but instead of a 90-minute service, they get one that’s 60 or 30 minutes.” (The org will release industry sales numbers for late 2008 and early 2009 later this month.) “It’s similar to right after 9/11, when we all held our breath and wondered what would happen,” McNees says.

To extend the time between treatments, clients are channeling their inner aesthetician and attempting to perform their own treatments at home. “I’ve forgone my usual brow wax in favor of plucking myself, though I’m less happy about those results,” says Stacey Finkelstein, a University of Chicago graduate student. If there’s a bright side to former clients DIYing spa services, Gerard says, it’s that people often buy the products used in their favorite treatments at venues like Bliss for at-home use. So customers may be spending less on services, but they’re dropping more on products.

Some clients are forgoing other splurges—new shoes, eating out—so they can continue spa-ing, according to Kelly Mack, a facialist at Lakeview’s Absolute Precision Skin Care. “I’m surviving,” she says. “I still have some clients cancel because they need to make ends meet. But I have a wait list, so if someone does cancel, I can usually fill it.”

Others are holding off on booking spa treatments until they can get a discount. “I’ve been hoping that treatments go on sale,” says Alexia Koelling, who works in the Loop. “I really want a facial, but I don’t want to pay $100!” Koelling shouldn’t have much trouble finding a good deal right now, says ISPA’s McNees. To stay afloat and keep clients walking through their doors during this challenging fiscal time, spas are rolling out scores of discounts and promotions on a weekly, daily, even hourly basis. For example, at the Four Seasons, Swedish massages are $30 off Monday through Thursday; at exhale, facials and massages are 50 percent off at 8am, seven days a week; and at Bliss, the “Farewell to Bush” special offers 20 percent off Brazilian waxing through February 12. So if you’re smart about when and where you go, there’s no need to wait until a back spasm to book a massage.

Full Article and Credits

Affordable Spa, Chicago IL Spa Lifestyle, Chicago Illinois Day Spa, Spa Bankruptcy, Spa Professionals, Spa Profits

Radiance Salon & Spa closed Salem OR

January 30th, 2009

Woman’s latest closed business upsets some
Salon employees, gift-card buyers are left hanging

A Salem businesswoman who is filing for personal bankruptcy has closed several area businesses in the past few years, affecting dozens of people.

It is not known whether Cathryn Thiessen will file for bankruptcy for her businesses. Closed businesses with nearly no assets are unlikely to file for bankruptcy, said Thiessen’s attorney, Marc Gunn of Salem.

Thiessen, who also foreclosed on her Salem home, is expected to file for personal bankruptcy within 30 days, Gunn said.

Thiessen’s Keizer business, Radiance Salon & Spa, closed this week. Radiance had at least 10 employees.

Thiessen had few employees at her other failed businesses, which included two florist shops and a Women, Infants and Children store, Gunn said. Those three Salem-area businesses shuttered several months ago.

She is suspected to have failed to make payroll tax payments and failed to provide final two weeks of pay to some Radiance employees, Gunn said. Some customers are out money as well.

All people who bought a Radiance gift card will not be able to redeem it. However, a couple area salons have offered to give some credit or services to gift card holders: Bella Vita Salon & Day Spa in Salem and Spa Willamina in Portland.

The attorney general’s office also has posted a notice on the door of the salon telling people who bought Radiance gift cards how to file a complaint.

Keizer resident Lori Davis’ daughters bought her and her husband a $180 gift card. Davis and her family are not too upset about the money loss.

“There’s people that are probably hurting worse than we are,” she said.

Four former Radiance employees said the owner was taking Social Security taxes from their paychecks, but not making the payroll tax payments to the federal government.

It is highly likely that what employees are saying is true, though the case is still in its early stages, Gunn said, adding that he has not officially verified the status of Thiessen’s payroll tax payments.

“For almost all businesses that end up in this stage, payroll taxes are just par for the course — 98 percent of the time the payroll taxes aren’t being paid,” Gunn said.

Rachel Martinmaas worked at the salon from March 2006 to August 2008.

“I have not had any income reported to the Social Security Department since 2006,” said Martinmaas, a former salon coordinator.

The government will pay the Social Security and Medicare the employee was supposed to pay in cases such as this, Gunn said. The employer then would owe the government money.

“Employees are not going to suffer just because an employer could not pay taxes,” he said.

Former Radiance stylist Tara McMullin said she did not receive her last two weeks of pay when the salon closed.

“I’m just really disappointed and let down,” McMullin said.

Employees were given the option to receive their final two weeks of pay in salon supplies and equipment, Gunn said. Workers who declined may be able to make a claim for their last two weeks of pay in bankruptcy court.

Former Radiance employees who wish to receive unemployment may file with the state government, he said.

McMullin also is upset because she and other stylists did not receive the names of their clients in the salon database. So, many stylists have posted their contact information at their new jobs on the doors and windows of the empty business.

“I loved the girls I worked with and the clients I had,” said McMullin, who now works at Bella Vita.

Thiessen likely will not be incarcerated for tax evasion as the government is aware of her situation, Gunn said. Tax evasion is not when someone does not pay but when someone intentionally hides nonpayment from the government.

“She’s very sorry this happened,” Gunn said. “This is certainly not what she wanted. This is tough times for everybody.”

Full Article & Credits

Spa Bankruptcy, Spa Business, Spa Closing, Spa Closings, Spa Finder

Northwest Arkansas Bankruptcies – NU U Day Spa

September 7th, 2008

 

Jason Alan Fetcher, dba Nu-U Day Spa And Salon, dba Nu-U Sunbath, dba Nu-U Dayspa, dba Fetcher Development, 210 S. Napier, Greenland; Chapter 7; $618,782 debt filed Aug. 6; $9,613 assets

Full Article & Credits

Spa Bankruptcy, Spa Closing, Spa Legal Issues

Solana Med Spa Chapter 7 Bankruptcy filing Medspa Closings

July 23rd, 2008

Solana Medspa_1.png

BANKRUPTCY FILING

As the economy slows, the nationwide Solana chain of 50-plus franchised medical spas has locked its Irvine headquarters, filed for Chapter 7 bankruptcy, shut down its Web site, and disconnected its phone.  Their website indicates that another site is being developed by Higher Images.  Higher Images is a SEO and Internet Marketing and web design company.

The following is from a Medspa Blog:

Solana Medspas is out of business?

Sunday, June 29, 2008, 10:15:16 AM | Jeff BarsonGo to full article

Seems that Solana Medspas site is down. I’ve received two emails this morning asking if they’ve gone out of business and this comment on a Solana discussion thread in the forums:

“Well it looks like Buckingham and company can’t hurt anyone else. The website is down and they are nowhere to be found. Hey, Over It…the truth hurts. Are you sure you aren’t a Solana Owner in denial or just covering your rear end? Between the University of Arizona charges, Brooks College 60 Minutes expose and firing, Health West fiasco and connections, continuing client failures, deadbeat dad website stating a failure to pay tens of thousands in child support to his ex-wife (which was the final straw on why we didn’t contract with Solana), etc… Wake up everyone associated or affiliated with Buckingham. it is time you recognize him for who he is before he hurts more people.”

I don’t know why the Solana Medspas site is down but it can’t be a good sign. (The first time you load the page you may see a little ‘Solana Medspas Logo’ flicker for just a second before you’re redirected to the under construction page. This is usually a sign that the ISP has suspended the account.”

Neither the company’s chief executive, William Maya, nor its bankruptcy attorney could be reached for comment.

The company founder, John Buckingham of Mission Viejo, said he sold Solana on Nov. 20 to a private equity company in San Clemente and could not speak in detail about its current status.
Buckingham remained a director of the company, which helped entrepreneurs set up medical spas that provided spa services plus non-invasive cosmetic medical procedures such as Botox injections.

As recently as March, Buckingham predicted that the nation’s economic slowdown would help Solana MedSpas by freeing up new retail locations for its medical spas.
In an interview with CNN/Money, he said he was “excited about taking advantage of this year’s store vacancies to open another 20 locations in malls.”

At that point, he said Solana had 50 spas “located in upscale strip centers and lifestyle centers, which are typically open-air malls.”
In May, Solana struck a deal with cosmetic-laser company Cutera Inc. of Brisbane, Calif., which declared Solana the “preferred provider” for its products at medspas nationwide.
That announcement said Solana “has sold over 70 stand-alone retail med spas with others scheduled to be opened in 2008” and had established a new division, Solana MD, to open aesthetic spas in doctors’ offices.
Solana’s filing said it had $370,028 in liabilities but assets of only $11,713.

FRANCHISE ADS

Solana MedSpa franchises are still listed as for sale on franchising Web sites, with a total investment of $400,000 to $780,000.

The Franchise.com site, for example, says:
Solana MedSpas has forged a new medical spa model by combining cutting-edge aesthetics and wellness technologies with traditional spa therapies in a retail environment.
In a short period of time, Solana MedSpas has become a nationwide leader in medical spa development with a growing network of uniquely branded medical spas. With an emphasis on regulatory compliance, healthcare innovation, education, marketing and customer service, Solana MedSpas has emerged as the fastest growing developer of MedSpas in the US.

The Chapter 7 bankruptcy filing means that the company will be liquidated, not reorganized.

BANKRUPTCY DETAILS
Solana’s current owner is Strategic Connections L.P., which is listed in the July 7 bankruptcy filing as “c/o WEM Management Company, 422 Avenida Salvador, San Clemente.”
The company’s largest listed creditor is its owner, which had floated it a $160,000 loan.
Solana said it had income of $456,989 so far this year from its consulting services to owners and operators of spas.
It paid Maya $161,112 in salary from Nov. 24, 2007, through June 24, the bankruptcy filing said. Buckingham’s salary for that period was $148,918.
The one company-owned medical spa, Resolutions, A Solana Medspa, also filed for bankruptcy under its legal name, Solana Medspa Development LLC.
The Resolutions medspa, located in a Rancho Santa Margarita shopping center, closed suddenly two weeks ago without explanation, said a hairdresser working in the adjoining hair salon.
The medspa listed assets of $11,713 and liabilities of $121,329. It cited $0 as the value of its unsold inventory of cosmetics, cosmeceuticals and Botox, which were purchased for $51,388.
Irvine-based Allergan, the maker of Botox, is its largest creditor. The medspa owes Allergan $49,260, the filing said.
The Resolutions spa had income of $225,555 so far this year, its filing said.

MedSpa, Medical Spa, Spa Bankruptcy, Spa Closing, Spa Closings