Laser Focus

Bruce Fabel knew he had to experience all facets of the business before making any changes at Ideal Image. That's why he's tested every treatment the Tampa-based chain known for laser hair removal offers.

Because the lasers are energy based, Fabel has his nurses turn up the test to the highest energy so he can feel the maximum potential discomfort. He's now testing injectables and other skin rejuvenating options as he focuses on expanding the company's services. Fabel spends one week each month in the field, visiting Ideal Image's 110 locations and 17 franchises in 31 different states and Canada.

The 50-year-old president is experienced in domestic and international expansion, and has led brands such as Calvin Klein, Nike retail, Warner Brothers Studio stores and GameWorks. After Steiner Leisure Ltd. bought Ideal Image in late 2011, it recruited Fabel as president of the laser hair removal chain in December 2012 to help grow the business. “My whole career I've been fortunate to be building and growing and figuring out how to expand the number of locations quickly and successfully,” Fabel says.

Since, Fabel has guided Ideal Image through its largest one-year expansion, with 30 store openings in 2013, including an international location in Canada. Fabel's next step in his growth strategy is expanding its services beyond laser hair removal to anti-aging, beauty and cosmetic services.

Ideal Image makes up around 15% of the revenues for Steiner Leisure, a publicly traded company based in Coral Gables, with $855 million in revenue in 2013 (symbol: STNR; recent price: $39.41).

In the quarter ended March 31, Steiner Leisure reported $7.4 million in net income, or 50 cents earnings per common share, compared with $12.7 million, or 86 cents per share in the same quarter in 2013. Ideal Image's revenues increased 22.5% in the first quarter, from the year prior, however, average weekly revenues dropped from $30,782 to $27,696.

William Blair analyst Daniel Hofkin attributed the drop partly to “incremental competition on multiple fronts (from the likes of dermatologists, relatively inexpensive and less permanent take-home DIY treatments, etc.).”

Fabel insists that the company is concentrated on building the foundation to rapidly grow next year, while it holds off on expanding to new locations this year. Nicole Strothman, Ideal Image's general counsel for the last nine years, says Fabel “puts 200% in everything he does,” including shifting focus to processes, procedures and accountability. The shift has helped turn a “family-run business into an organization that is more tight with a level of professionalism,” Strothman says.

Patience is a practice in which Fabel believes. For his first three months, Fabel says he just observed. “You don't want to come in and change everything on day one,” he says. Once he determined opportunities to improve, he compiled them into an executive plan.

After earning buy-in on his main initiatives from team leads, the company started implementation in February 2013.

Be like the Ritz
The biggest push Fabel made for change was addressing customer service. He wanted Ideal Image to have the service levels of a Ritz-Carlton or Nordstroms. With Yelp, Google and Facebook, a negative experience can be quickly shared and made viral. That's why Fabel says it's more important than ever to do whatever possible to ensure the customer has a positive experience.

Consumers are less patient, Fabel says. “The days of let me push this up the chain are gone.” He had the company create a leadership training so all employees are empowered to make decisions to ensure customers “have a wow experience,” he says. The biggest piece of this change was rewriting procedures, rules and training programs to help all employees at the store explain why something may be different than what the customer expected, and have the authority to make it right.

The second piece that Fabel focused on was expanding services. Fabel noticed the company was doing such a great job with hair removal that it had no repeat customers.

In November 2013, the company started implementing Ultherapy skin lifting and tightening through ultrasound technology.

The company is currently 75% complete in implementing injections such as fillers and wrinkle releasers. Though it has only advertised to existing customers up until this point, Ideal Image has already completed 1,000 treatments since the roll out. The service costs more than $15,000 in inventories and barcodes per location, Fabel says.

Ideal Image has also started offering tattoo removal services in 10 test markets. The new technology called PicoSure is 100 times more effective than the old technology. Each machine costs $300,000, according to Fabel.

The rollout of new services requires intensive training plans, with more than 300 nurses in the field and close to 1,000 employees at the company. Fabel says the company has refocused training on the upsell and has restructured compensation models so everyone can be rewarded for selling additional services.

Altogether the new services equate to hundreds of thousands of dollars invested in each location, he adds.

Tackling Turnover
The third issue Fabel decided to tackle was employee turnover. In 2012, the company experienced a 55% turnover in nurses. Traveling around the country with a new head of human resources, Terri Hoskins, Fabel conducted analysis with employees in different Ideal Image locations, in addition to surveying providers.

They found the No. 1 reason for turnover was competition from other job opportunities. To compete with hospitals, they implemented shift differential pay, giving a few more dollars an hour to providers who worked on a Saturday or Sunday. The company also increased its continuing education opportunities and reimbursement.

They also found that the locations didn't seem to have an upward ladder in place. So they instituted a training program for providers to become sales associates through a 12-month training program. They also set up leadership training for sales consultants to become regional managers and regional managers to become national directors.

The changes cut the turnover by more than half, to 21% in 2012. Fabel says the reduced turnover is a huge savings for company and allows for better customer service. Because hair removal from a bikini area is an intimate procedure, people want to see the same provider.

The company spends around $15,000 per provider on 120 hours of training, on top of the provider's required nursing degree. Legally, providers only need to require four additional hours of training.

Though the company is investing a lot now to prepare for future growth, Fabel is convinced it will pay off and he'll be able to curb his competition that advertises with $99 deals on Groupon. “If you were to get lasik on your eyes, would you buy that on Groupon? You probably wouldn't do that to put a laser to your eye, so why would you go to Groupon to get a laser on a private area of your body?”

Fitness Focus
Bruce Fabel believes the “best ideas come when the blood flows.” The adventure seeker who has climbed Kilimanjaro, Mount Whitney, and Mount St. Helens is an avid scuba diver and frequently practices martial arts. “Statistically I can tell you from a business leader that if your organization is healthier, it reduces the amount of sick days, it reduces things like back and knee injuries,” Fabel says.

“I also believe it creates a better mental attitude.” That's why the main cultural push he's made at Ideal Image is creating an Employee Wellness program. The program includes:

Three workout classes a week in office (Yoga, Boot Camp and Step)

Company sponsored 5ks every month

Corporate discounts to LA Fitness and Life Time Athletic

Ideal You Contest - Employees compete in weight-loss challenge to win a trip to the Caribbean

Executive Summary
Issue. Expansion Industry. Laser Hair Removal Key. Improving processes, procedures and training can boost return.