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Tuesday, Nov 29, 2022

Drybar’s Blowout Potential

Liz Williams is performing a balancing act.

The newly installed CEO at Irvine-based blow-dry and styling bar Drybar Holdings LLC, and former Taco Bell International president, steps into the top spot as the chain focuses on reopening shops amid stringent health and safety standards for salons of all types in response to a global pandemic.

The firm is also continuing to lay the groundwork for big expansion plans—financed in part through a $256 million product line sale completed at the start of the year—that aims to take the company from nearly 150 doors to more than 500 locations.

“I’ve been a longtime client of Drybar … and I’ve always loved the experience,” Williams told the Business Journal.

“I was really drawn specifically to the strong brand, the business model, the opportunity for growth—both in the U.S. and internationally—and just the culture of the company.”

Williams’ appointment marks the first female CEO for Drybar, which was founded in 2010.

“After 10 fulfilling and successful years in business, she will help usher in a new era for the brand and expand upon our vision both in the U.S. and internationally,” Drybar founder Alli Webb said in a statement.

From Restaurants to Salons

Williams, while at Taco Bell, expanded the restaurant chain into markets such as Thailand, Australia and New Zealand. Master franchise agreement with operators in Spain, Brazil and India were also struck during her time overseeing the company’s international business. She was also Taco Bell Global CFO before heading up international.

Following the departure of Taco Bell Chief Executive Brian Niccol to Chipotle Mexican Grill Inc. (NYSE: CMG) in 2018, Williams and Julie Felss Masino, president of Taco Bell’s North American division, were named co-leaders of the Irvine-based restaurant chain, until new CEO Mark King was hired last July.

While quick-serve seems a world away from the upscale Drybar experience, there are similarities, Williams said, that made the jump to Drybar an easy choice.

“I think, even though the brands couldn’t be more different in what they offer, there’s an element of just the importance of building strong brands,” she said. “And in this instance, the Drybar founders really built what I like to say is a cult brand.

“I think there’s a lot of crossover in terms of how to make that brand stronger. And, also, the franchising piece of Drybar. I learned at my time at Taco Bell just how wonderful franchise partners can be in driving growth.”

New Reality

Currently, Williams and team have their hands full getting salons back open, adhering to the patchwork of policies and guidelines in place market to market where Drybar has locations.

Just fewer than 80 are reopened today, with the remainder to launch back up over the next few weeks.

New practices for those salons that have reopened include face coverings for employees and clients, temperature checks with digital thermometers, continuous disinfecting and limiting the number of clients in the shop at any given time.

Virtual check-ins are now a useful tool, also helping with physical distancing within the shops.

The new procedures have certainly brought on additional costs to companies, but it’s now the new normal for businesses.

“I think right now it’s the cost of doing business that we’re all facing. Of course, it definitely adds cost, but there’s no choice,” Williams said.

Results are mixed in general for the business community as to who is seeing sales return and who is still challenged. For Drybar, it’s banking on the importance of personal grooming and wellness among clients and seeing them return when locations reopen.

“I think people more than ever want a bit of self-care and want to look good and feel good, especially after being isolated and being at home for weeks and months,” Williams said, adding there is less event-driven business like weddings and more a focus on individuals coming in for pampering.

Product Line Sale

The company’s recent growth plans come amid a backdrop of a deal that saw the sale of Drybar’s products business to El Paso, Texas-based Helen of Troy Ltd. (Nasdaq: HELE) at the start of this year.

Helen of Troy, with a market cap of $4.7 billion, bought the business—which includes hair dryers, curling and flat irons, shampoos, conditioners, volumizers, brushes and clips—for $256 million.

Former Drybar CEO John Heffner joined Helen of Troy after the sale.

For Helen of Troy, the deal marked the addition of a prestige beauty brand into its portfolio of styling tools and products under lines such as Revlon Hair Tools, Pert and Bed Head.

Products range from $195 high-end hairdryers and $165 curling wands to an assortment of brushes and shower caps running under $20. Regulatory filings from Helen of Troy indicated the products division posted more than $1.6 billion in revenue last year.

The sale didn’t include the salons themselves, although Drybar now has a global license from Helen of Troy to use the company’s trademark in its doors. ­

The deal gives Drybar’s executive team room to make good on expansion plans of its salon footprint.

Franchise Focus

There isn’t a timeline for the growth, understandably so, given the unprecedented operating environment the world is in and with travel restricted internationally.

However, Williams said “there’s opportunity for many years to come for this brand.”

The company currently counts 143 locations, including five in Orange County at properties such as Fashion Island, Pacific City and Monarch Beach Resort.

Nearly two-thirds of Drybar’s locations are company owned, while the remainder are franchised.

Franchising is Williams’ specialty. She did it at Taco Bell and will aim to do the same at Drybar where most of the growth would come via that channel.

State documents indicate it costs between $639,000 and $1.4 million to open a franchised Drybar business, including a payment of up to $131,500 to the franchisor.

On the international front, Drybar was in talks with a major overseas retailer prior to COVID. The growth there could consist of shop-in-shops concepts, such as what Drybar did with Nordstrom in New York, or free-standing stores.

Said Williams of international deals: “We’re really excited to pick those conversations back up.”

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