In 1991, a newly minted religious studies and philosophy graduate of Gonzaga University pitched a business idea to the developers of NorthTown Mall, and, without a business background, drafted a business plan, borrowed money from a bank, and went into business for himself.


His plan was to open a different kind of beauty salon in the mall, which was being redeveloped at the time. The result was a six-employee store called NW Beauty Supply & Salon. That venture today has grown to 17 stores, 170 employees, and annual revenues of more than $10 million. The company is now called NW Beauty Inc., though its outlets do business under the names NW Beauty Supply & Salon or Beauty Works.


Greg Cazzanigi, founder, owner, and president, says the company plans to open this month in the Shadle Center here, its 18th store, and is considering opening stores in Pasco and Walla Walla, Wash., and Lewiston, Idaho, as soon as next year.


Beauty Store Business, an industry magazine, says NW Beauty is the largest salon-store chain in the Pacific Northwest.


Its a typical upstart-from-nothing story that doesnt happen too often any more, says Cazzanigi.


He says the revenue stream in NW Beauty stores is pretty much the opposite of a typical beauty salon, in that about 70 percent of its business comes from the retail sale of hair, skin, nail, and cosmetic products, while only 30 percent comes from the work of hair stylists.


At present, NW Beauty operates 11 NW Beauty Supply & Salon stores and six Beauty Works stores, all located in Washington and Idaho. Beauty Works outlets typically are located in big shopping malls, have more space and larger product selection, and offer such extra services as facial treatments. The NW Beauty Supply and Salon stores usually are located in retail strip centers and are smaller.


Its a simple concept thats all about finding the right locations and staying on top of trends, says Cazzanigi. Many people say location, location, location, and its really true. But its not just the number of cars that go by, but also who your neighbors are.


He says that bringing customers into NW Beauty stores is just the first step, and adds, We spend a lot of time trying to hire the right people so the customers have a good experience.


Only about 10 percent of NW Beautys customers are men, Cazzanigi says. Its typical customer is a woman age 25 to 54. Im looking for locations in convenience centers that attract those same female customers, he says.


The companys headquarters are located at 5320 E. Sprague, where it moved just about a month ago and is still furnishing its offices. Cazzanigi says headquarters management is leanjust himself, an office manager, an area manager, and a buyer who works on the Internet out of her Lewiston home. The Sprague office has 10 employees total.


Cazzanigi says NW Beauty has added one to two stores each year, depending on the opportunities that come available.


Id rather run it really well than grow it big, he says.


With the high exposure it gets from four Beauty Works stores in large shopping malls in the Seattle area, Cazzanigi says he now receives about 12 inquiries a month from shopping centers across the Northwest asking if it would consider expanding to those locations. He says some queries have come from markets NW Beauty has yet to enter, most notably Portland and Boise.


In addition to the four Beauty Works stores in Seattle, it operates one in NorthTown Mall, where its original NW Beauty Supply & Salon store also still operates, and at Spokane Valley Mall. In addition to the NW Beauty Supply & Salon store at NorthTown, the chain operates four other stores under that name here, as well as two in Wenatchee, two in Kennewick, one in Coeur dAlene, and one in Moscow, Idaho.


Cazzanigi says the beauty industry is much like the fashion industry, and that his buyer is constantly searching for new, seasonal, and consumer-trend items to sell in the companys stores. He says that hair coloring and skin products are high-volume sellers because of a current industry emphasis on slowing or concealing the aging process.


The challenges


About 30 percent of NW Beautys employees are licensed hair stylists, and Cazzanigi admits its a challenge to keep them on the payroll.


The best stylists tend to move on and open their own salons, he says. Yet we try to keep them by offering very good pay, a plan with medical benefits, and continuing education to advance their skills. They really appreciate the education.


In addition to wages and tips, NW Beauty stylists earn commissions on products they sell in conjunction with their salon services, he says. Wages are based on experience and how much business an individual stylist is able to generate, Cazzanigi says.


The products sold at NW Beauty stores arent unique to the stores, but are typically professional brands sold at high-end salons.


Some salons carry pieces of our merchandise, but nobody has all the products in one place like we do, asserts Cazzanigi. He says each NW Beauty store has about 10,000 pieces of product. He adds that the companys Seattle stores also carry some higher-end products.


We tailor the inventory to the customer demand in a particular market, he says.


The typical outlet has 1,500 to 2,500 square feet of leased space, he says.


Cazzinigi personally bought the companys 20,000-square-foot headquarters building on East Sprague last December, had it remodeled by McCloskey Construction Inc., of Spokane, and leased part of it to NW Beauty. The headquarters previously were located at 423 E. Cleveland.


Currently, about 5,000 square feet of the building is warehouse space, about 2,500 square feet is office space, and Cazzanigi has been lining up tenants for the remainder of the space. A business called The Tile Outlet has leased space there and space is also being prepared for a Subway sandwich shop and a Sprint Wireless outlet, Cazzanigi says. About 3,000 square feet of space there is still available for lease, he says.


Although Cazzanigi says hes never personally cut hair, he grew up in a Wenatchee home where both his parents were hair stylists and ran their own small, successful business.


He moved to Spokane in 1985 to study religion and philosophy at Gonzaga, graduated in 1989, and soon decided to capitalize on what his parents had taught him about the hair industry at a time when NorthTown Mall was undergoing a major renovation and expansion under then-owner Sabey Corp.


Cazzanigi makes no predictions about where the business will be in five years, but does say Spokane is a great regional center for the operation and that its presence in Seattle will continue to grow.


The challenge for me is to run this business properly and manage its growth. We need to be the right size for the resources we have, he says. Im now looking at other markets.