annualreport
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//a challenging year While our Federation has come a long way in the past few years, the year has been a challenging one. Inevitably, the economic downturn has had a big impact on our members, who are trading in the uncharted waters of a threatened triple-dip recession. Few people can be unaware of the problems high street businesses face – punitive rents, climbing business rates, ever-increasing competition from out-of-town shopping centres, car parking in town centres, to name just a few. Nevertheless, the contribution the hair and beauty industry makes to the British economy is enormous – we generate more than £5bn of revenue, and the 35,000 or so UK hair and beauty salons employ more than 250,000 people between them, even though the vast majority of salons (93%) have fewer than five employees. All the more important then that we support our members, not only with a strong package of member benefits, but by giving voice to our members’ views on issues that really affect their business. Having the Federation behind you can make a real difference – you’re never left to struggle on your own. We know how valuable this support is from the volume of calls our members make every day to the NHF helpline. Top of the list for the most popular member benefit, the helpline provides expert advice on a vast range of topics ranging from maternity leave through to employment tribunals; apprenticeship contracts through to landlord disputes; employee performance through to chair-rental agreements. Our members are mostly far too small to have their own HR departments, so having advice on tap 24/7 at the end of the phone gives enormous peace of mind – worth every penny of the annual membership subscription.
We also speak for our members collectively on the major issues facing our industry – the state of the high street, the problems with an education and training system that turns out young people who simply don’t have the skills employers need in their salons, potential new health and safety legislation which could add millions to the costs employers pick up, as well as VAT and the national minimum wage. Individually, salon owners have no influence on national and international decision-makers, but with the Federation speaking for everyone in the sector we have a powerful voice that is increasingly influential. Nevertheless, there are further challenges ahead of us. We haven’t made the headway we had hoped on increasing our membership. We need to keep exploring new and different ways of delivering outstanding value to our members, getting to know our members better and fully understand what they need from their Federation to deliver future growth. Our sector is energetic, youthful and fast-changing so we need to keep moving forward, not staying still. We recognise the need to recruit new members and engage with a younger audience. Without them it will be difficult for us to keep up with the rapidly increasing pace of change and to connect with the people who just starting out in our industry – they are the salon owners of the future. We need to tap into their energy, enthusiasm and creativity so we can help all our members to build their businesses into profitable and sustainable enterprises, taking our industry forward to a lively and vibrant future. Mark Coray, President NHF
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//a year of change Against the ongoing backdrop of a tough economic outlook, the NHF continued to drive forward its modernisation blueprint, Strategy for the 21st Century. This placed a renewed focus on membership and recruitment, education, lobbying for a better business climate for small businesses and reform of the high street. On the artistic side, the year was dominated by the launch of Barbers’ Elite and the inaugural Britain’s Best competition. After an enforced absence in 2011 because of illness, the Federation welcomed Secretary General Eileen Lawson back in 2012. Her return led to an immediate re-invigoration and expansion of head office as well as the re-organisation of various existing roles and responsibilities. However, Eileen decided to take early retirement in the autumn. After five successful years with the Federation her enthusiasm and expertise will be missed. All at the Federation thank her deeply for her contribution and wish her well in her retirement.
membership The economic downturn is continuing to affect small businesses who are struggling with factors such as the decline in footfall in Britain’s high streets, rent and rate rises, increased legislation, the national minimum wage and the challenges of dealing with employment law issues. Increasingly, these pressures mean that members are making
difficult choices when it comes to how they spend their money. NHF has seen a decline in membership as a result, making it even more important to drive home the message about the exceptional value for money NHF subscriptions represent. The key theme throughout the year has been ‘Can you afford not to be a member?’, reflecting the fact that the value of the membership services is worth the membership subscription many times over.
legal lifeline This service gives salon owners unlimited expert advice simply by picking up the phone at any time, day or night, for help on legal issues, employment law, contracts, payroll, tax, music licenses and insurance – all for less than £5 per week. Not surprisingly, the helpline continues to be the top-rated member benefit, handling calls on employee conduct, terms and conditions, absence management, redundancy, maternity leave, dealing with customer complaints and potential personal injury claims, issues around selfemployed chair renters, post-termination breach of restrictive covenants and disputes with landlords. A full review and expansion of the NHF Factsheets was undertaken in April to give members the benefit of immediate downloads from the website during 2013.
salon focus The Federation’s bi-monthly magazine SalonFocus continued to break new ground and provides an invaluable service for members, appearing each year in the top three most popular member benefits. Among many “scoops” during the year, it revealed how proposed European Union health and safety rules had the potential to cost the industry as much as £75m, how a government “windfall” for businesses taking on apprentices was nothing of the kind, at least not for hairdressing salons, how the industry was among the worst in the country for flouting the national minimum wage and how hairdressing staff were particularly at risk of falling prey to “payday” lenders. It was also instrumental in explaining exactly how the government’s decision to change the tax treatment of chair renting was going to affect salon owners as well as helping to communicate both the development and content of a new “manifesto” for apprenticeships, developed in the latter half of the year on the back of the government’s Richard Review. The NHF was delighted that, once again, SalonFocus was shortlisted in the “Magazine of the Year” category in the Trade Association Forum’s prestigious Best Practice Awards.
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e-newsletter & social media The launch of an “e-newsletter” in late 2012 provided a further channel for information and advice, to members and nonmembers alike providing updates on events, member benefits, plus regional or national NHF news. During 2012 the Federation sharply accelerated its presence on social media, launching itself on Twitter (@nhfederation) as well as developing a new interactive Facebook page plus launching on YouTube and Pinterest. Traffic on the NHF Facebook page has increased rapidly, reaching almost 6000 ‘likes’ from visitors and more than 1000 followers on Twitter in less than a year.
external relations The Federation continued to consolidate its reputation nationally and within Europe, campaigning on a range of issues which affect salon owners working within the hair and beauty industry. The Federation submitted evidence to the government’s Richard Review of apprenticeships, building on a substantial survey of members carried out over the summer. This, in turn, has developed into a new “manifesto” for apprenticeships (see Education). The Federation liaised closely with the Health and Safety Executive and the government during the year to battle proposals being put forward by Coiffure EU and UNI Europa Hair and Beauty to bring in new health and safety rules that, it was feared, could, if implemented to the full, be deeply onerous to the industry and potentially cost salons millions of pounds. The Federation was highly active in lobbying against the proposals, both in Europe and the UK, including gathering unprecedented industry-wide support.
The Treasury’s decision in the Budget in March that it would close what it termed a tax “loophole” around the treatment of VAT and chair renting led to the Federation working very closely at a high level with Treasury officials. Significantly, it helped to clarify proposals put forward within the government’s document VAT: Addressing Borderline Anomalies that could have penalised some salons unduly. It was also active in supporting and advising affected members. The Federation, once again, submitted evidence to the Low Pay Commission ahead of its deliberations on any new rate for the National Minimum Wage. It highlighted the damaging effect continually raising the wage was having in eroding pay differentials between trainee and junior staff and it emphasised how the age limitations of the apprentices’ NMW was deterring salon owners from investing in older apprentices. It liaised closely with the Department for Business, Innovation and Skills on proposals, first, for “compulsory no-fault dismissal” and then later, when this idea was dropped, on its plans to introduce “settlement agreements” designed to reduce the number of unfair dismissal claims going to tribunal. In November, Secretary General Eileen Lawson was invited to brief the influential All Party Parliamentary Group for Micro-Businesses on its proposals for the reform of VAT, in particular on its CuttheVAT campaign and its campaign to create a more flexible, nuanced VAT system, as outlined in its 2011 report Cut & Dried? The Case for a VAT Revolution for Hairdressing Salons.
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//artistic activities Artistically, the year was undoubtedly dominated by the launch of Britain’s Best in November, which proved to be a huge success on its debut at the Birmingham Hilton Metropole. More than 250 people attended the event, which was marked by the innovative use of mobile, text and email-based voting. Equally innovative were the Central England Awards and the Welsh Open Championships, both of which also used interactive, email-based voting as a way of generating greater interest, excitement and engagement. The other major event of the year was the formal launch of the NHF’s new barbering team, Barbers’ Elite, which has quickly established itself as a high-profile showcase of the NHF’s barbering talent. Barbers’ Elite demonstrated to great success at Salon International in October as well as the Federation’s annual conference in Cardiff in the same month. It was a busy year, too, for the NHF Inspire artistic team, which also presented at Salon International and the Cardiff conference, as well as at many local and regional events. NHF Inspire was mentored during the year by the Trevor Sorbie Artistic Team, which took over after a successful tenure by RUSH. At a local level, NHF Avon launched its own regional artistic team, Fusion, under the mentorship of Richard Hillier of Stages Hair Design in Bristol. The NHF’s long-established Photographic Stylist of the Year competition, meanwhile, was won by Linda Spackman, of Cutting Crew in Willesden Green, London.
education Education was one of the Federation’s key strands of activity during 2012. The launch by the government of the Richard Review into apprenticeships was, in many respects, the pivot around which this activity revolved. The review, set up in June, tasked entrepreneur Doug Richard to carry out a wholesale analysis of apprenticeships, where they are going wrong and how they could be improved. As well as encouraging members to submit evidence individually, the Federation, led by its Education Committee, carried out a wide-ranging survey of members’ views, building on similar research undertaken in 2011. Published in November, this highlighted widespread concerns that apprentice training was too college-based, was not preparing youngsters for life on the salon floor and that employers did not have enough say in designing or delivering training. The apprentices’ national minimum wage, as highlighted above, was another key concern raised. The unprecedented response from members led the committee and head office to work together to create a ground-breaking “manifesto”, The Future of Hairdressing & Barbering Apprenticeships, that will in time act as a springboard to the creation of an NHF-approved hairdressing qualification. More locally, but in many ways just as importantly, NHF Bournemouth and Reading Networking Group in the autumn unveiled an innovative mentoring scheme, where hairdressers are being encouraged to work with local colleges – in this case Eastleigh, Fareham, Southampton and Bournemouth – to pass on their skills and knowledge to the new generation of stylists.
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//your national executive council Mark Coray
Elke Hayden
Ann Goddard-Wilson
Paul Curry
Eileen Clough
Dorrell Harrison
Jeffery Bonn
Avril Walker
Agnes Leonard
Michael Thornhill
Joe Cownley
Audrey Morgan / Ian Egerton
John Armstrong
Glynis Elliot
Alan Rapkin
NHF national president
NHF national vice-president
Honorary treasurer
Yorkshire region
Eastern counties region
James Beattie Welsh region
South west region
North west region
North east region
Central England region
Southern region
West of Scotland region
East Midlands region
East of Scotland region
London region
London region
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//working for you President and Vice-President & Honorary Treasurer
Sub-committees
Mark Coray served his second full year as President and continued to demonstrate a “can-do”, positive approach, maintaining a very visible and accessible media profile. Paul Curry served as Vice-President during the year and provided valuable support to Mark Coray.
Our thanks go to all the individuals who have supported NHF with their time, commitment and enthusiasm:
Jeffery Bonn served this third year as Honorary Treasurer liaising closely with Head Office and Simon Thomson, Director of Finance and Administration.
National operations The year saw the recruitment of a new marketing executive, Tori Priestley as well as an events assistant, Melanie Collins. Stephanie Munno moved up to become Director, Membership Development while Tina Beaumont-Goddard became Director, Membership Services, Administration & Operations with Simon Thomson stepping up to become Director of Finance and Administration . Other appointments included Jo Yates, who came on board as a web administrator, and Andrea Cudjoe, who was recruited to the head office team as a membership administrator.
Artistic NHF Inspire team manager Rebecca Dickenson, owner of the Vanilla Rooms in Doncaster, stood down in February to be replaced by Colin McAndrew, owner of Medusa Hairdressing in Edinburgh. James Beattie, meanwhile, owner of Beattie’s & Co. in Brynmawr and Abergavenny, became the first team manager of the new Barbers’ Elite team.
Artistic Committee – Agnes Leonard (chair), Mark Coray, Paul Curry, James Beattie, Eileen Clough, Glynis Elliott, Ann Goddard-Wilson, Dorrell Harrison and Elke Hayden. Conference Committee – Paul Curry (chair), Jeffery Bonn, Eileen Clough, Mark Coray and Glynis Elliott. Education Committee – John Armstrong (chair), James Beattie, Eileen Clough, Ann Goddard-Wilson, Elke Hayden and Avril Walker plus several co-opted members. Membership Committee – Ian Egerton (chair), James Beattie, Alan Rapkin and Avril Walker. Joint Executive and Finance Committee – Paul Curry (chair), John Armstrong, Jeffery Bonn, Matt Bridger, Mark Coray, Dorrell Harrison and Mike Thornhill. Standing Orders Committee – Mark Coray (chair), Paul Curry, Avril Walker, Dorrell Harrison, Mike Thornhill and Agnes Leonard. Audit Committee – Mark Coray (chair), Paul Curry, Eileen Clough, Agnes Leonard and Avril Walker. Remuneration Committee – Mark Coray (chair), Paul Curry, Jeffery Bonn, John Armstrong and Mike Thornhill. A Recruitment Committee was formed in the latter part of the year in order to recruit the new Secretary General and consisted of the Remuneration Committee plus Ian Egerton, Agnes Leonard and Alan Rapkin.
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//representatives on other bodies Coiffure EU Mark Coray represented the Federation at Coiffure EU, a body that brings all the hairdressing trade associations across Europe together and which facilitates the Social Dialogue, a European Commission-facilitated meeting between Coiffure EU and trade unions in Europe representing employees. He was also elected to the Board of this body during the year.
Hairdressing Council (HC) Agnes Leonard and Ann Goddard-Wilson were the NEC’s representatives on the HC, the body appointed by statute to operate the state register of hairdressers.
The Hair & Beauty Benevolent (HABB) Eileen Lawson was the NHF’s representative on HABB, the benevolent fund that provides charitable support for hairdressers who have fallen upon hard times.
Habia Ann Goddard-Wilson and James Beattie were the NHF’s representatives on Habia, the government-appointed standards-setting body for hair, beauty, nails and spa.
World Hair Limited Mark Coray, Paul Curry and Audrey Morgan served as the Federation’s appointed directors of World Hair Limited during the year.
City and Guilds John Armstrong served as the NHF representative on City and Guilds, the creator of qualifications that help learners gain the skills that employers require.
Regional activity – It was a busy year for the NHF regions. Here are some of the highlights. NHF Avon recruited and launched a new regional art team, Fusion at the end of 2011. The team was mentored by Richard Hillier and gave its first public demonstration at City of Bristol College in February. March was marked by the Blackpool International Hairdressing Championships held at the newly refurbished Winter Gardens which attracted over 500 entries. A seminar was organised by the East Midlands region in March where the Sassoon artistic team showcased up-and-coming trends. More than 350 guests attended a very successful event.
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//regional activity The Devon and Cornwall Championships took place in April with South Devon College scooping four gold medals. NHF Bournemouth and Reading network group also held its annual competition in the same month, with two themes: A Masquerade Ball and Ladies Day at Ascot. Competitors produced some stunning pieces using the hair as fascinators for their models. The event was filmed by Sky TV. The Central England Awards were held at Aston Villa Football Club in May, with awards presented by Lee Stafford and attended by Trevor Sorbie and Beverly C who also demonstrated. The Welsh Open Championships were held at the Coal Exchange in Cardiff, also in May. Both events used innovative email-based voting for the first time. There were 11,500 email votes from around the region for the Central England Awards, while the new Shoot and Send competition at the Welsh Championships allowed entrants to showcase images taken on their mobile phones. This provided a springboard for using the same voting and entry methods for the new Britain’s Best competition held for the first time on 18 November 2012 at the Hilton Metropole Hotel in Birmingham. In the West Midlands, NHF celebrated 50 years in the business with former regional president Valerie Young and 100 friends and colleagues at a summer party in her honour. Valerie had been an NHF member through all that time – is that a record? NHF London region hosted a session in May on how to make better use of specialist hairdressing publications and how to create successful and compelling photo-shoots. The event was presented by the deputy editor of Creative Head magazine, Lauren Margrave, Sophie Knight of Babel Fish PR and star photographer Desmond Murray.
The London region also held a networking event in August with the added attraction of it being held at Ascot racecourse. Despite the London region being so busy, Ian Egerton (Region Secretary) also found time to do a charity bike ride for hairdressing charity HABB raising over £1600 in total. In July the Wolverhampton networking group used the Olympic Games as inspiration and enjoyed barbering demonstrations from Steve Clewlow, Franco Colabella and Richard Grizzle. In October, the NHF held its annual AGM and conference at the Hilton in Cardiff, with an ‘At Home’ evening at Cardiff Castle the night before. A demonstration from Alan Austin-Smith was one of the highlights of the event, explaining the importance of communication, customer delight, self-motivation and image in making a business successful. Salon International took place in October where NHF’s Barbers Elite presented a 25 minute show demonstrating five autumn/winter male looks on the Hairdressers’ Journal stage. The NHF Derby networking group held an evening with Simon Shaw, European artistic director at Wahl UK. The Festival Hall at Kirkby in Ashfield was packed with members and non-members watching Simon showcase his talents with a particular emphasis on the clipper cut. The Blackpool networking group held an afternoon event with John Peers demonstrating colour and cutting techniques using models supplied by Blackpool & Fylde College. In the autumn, the Bournemouth and Reading Networking group worked with local colleges including Eastleigh, Fareham, Southampton and Bournemouth to encourage salon owners to mentor hairdressing students and help with their end of term show. The Southern region held the South of England Championships in Southampton in November, attracting an audience of more than 250.
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//looking forward forward plans 2013 looks set to be a year of transition for the Federation, yet still one of progress. There will, of course, be a change of President, with Paul Curry replacing Mark Coray, at the annual general meeting and conference in Manchester in October. The Federation has also welcomed to its ranks a new Secretary General, Hilary Hall, who joined in April 2013 from the Institute of Leadership and Management, one of the UK’s leading workplace and vocational training bodies. Her background in vocational training, and her commitment to putting recruitment and membership at the heart of the Federation’s future agenda, promises exciting change to come. The work of the education committee in promoting its manifesto for apprenticeships will continue to be highly important. The government made its formal response to the Richard Review in March, and endorsed many of its recommendations, including the need to “empower” employers to design and develop apprenticeship standards and qualifications, something that is very much in line with the Federation’s thinking and aspirations. The Federation’s website, www.nhf.info, has been given a longneeded makeover, including offering new “tabs” about membership benefits, an NHF spotlight element highlighting membership offers benefits and a “salon search” tool to help the public find NHF member salons.
Politically, the Federation will continue to campaign for a more level playing field on the high street for small and micro businesses, including continuing to push for reform of VAT and parking laws that penalise high streets in favour of out-of-town shopping centres. It will remain active in Europe, especially over health and safety reform, as well as working with politicians of all hues and, where appropriate, the government to promote the interests of the industry.
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//salon focus
SalonFocus launched a number of new and exciting sections in January, including a “Business Focus” section designed to pass on best practice business tips and advice, a “Toolbox” section to focus on a piece of vital salon equipment or core salon relationship, a “Tried and Tested” expert panel to test and rate new products plus a new social media page and “Case confidential”, an analysis of a real-life call to the Legal Lifeline. The increased functionality of the Federation’s new-look website should also mean the magazine is better able to reach out to members to gauge and report on their views and opinions. THE ES
SENTIA
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This autumn will see the return of Britain’s Best, building on the excitement and momentum of last year’s event. The Federation’s Photographic Stylist of the Year Competition will be incorporated into this activity. Another key strand of activity will be around membership: recruitment, retention and membership support. NHF will be running seminars around the regions during the year highlighting and advising on key legal issues raised by members during 2012.
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Financials 1 National Hairdressers’ Federation Limited Summarised Income & Expenditure Account for the year ended 31 December 2012 Income Members fees Insurance commission
2012 2011
2012 2011
£ £
£ £
1,151,939
1,205,399
(Deficit) Surplus for the year before exceptional items
(45,267) 79,238
114,396 115,218
Sales to members
50,957 52,778
Exceptional items
Competition and seminar income
50,519 52,367
World Hair Limited funds distribution
35,000
Magazine advertising and sponsorship income
72,644 64,711
Reduction in VAT refund due from HMRC
(3,435)
Investment income and interest receivable
35,621 23,479
Interest received on delayed VAT repayments from HMRC
Other income
13,130
CEO recruitment costs
23, 041
Total Income 1,489,206 1,486,857 Website development costs Share of VAT unclaimed by members Expenditure (Deficit)/Surplus for the year after exceptional item Direct membership services Cost of sales to members Meeting expenses
450,475 394,966 5,956 7,589 144,745 149,094
(15,045)
6,265
-
(23,000)
-
(25,647)
-
- (56,084)
111,478 175,671
Realised gain on listed investments
6,232 2,089
Unrealised gains (losses) gains on listed investments
98,032
48,180 133,132
(44,628)
Affiliation fees and subscriptions
15,198 27,495
Surplus for the year
Competition expenses
97,207 89,477
Publicity and promotional costs
141,587 131,386
Honoraria
36,384 38,710
Staff costs
395,000 345,457
Premises and office equipment costs
105,693 117,634
Administration costs
108,404 117,693
Irrecoverable VAT Insurance premium tax Total Expenditure
(Deficit) Surplus for the year before exceptional items
25,474 31,615 8,350 6,641 1,534,473
1,457,757
(45,267) 79,238
Balance brought forward at 1 January 2012
2,516,849 2,383,717
Balance carried forward at 31 December 2012
2,565,029
2,516,849
>pg13
Financials 2 National Hairdressers’ Federation Limited Summarised Balance Sheet as at 31 December 2012 2012
2011
£ £ Fixed assets Tangible assets 448,645 465,121 Investments 1,292,621 1,097,831 1,741,266 1,562,952 Current assets Stocks 15,539 31,198 Debtors 80,509 102,659 Short term deposits and cash at bank 952,639 924,113 1,048,687 1,057,970 Creditors Amounts falling due within one year (224,924) (104,073) Net current assets 823,763 953,897 Provision for liabilities and charges - Total net assets 2,565,029 2,516,849 Represented by: Capital, funds and reserves Share capital 5,428 5,689 General funds: • Income and expenditure account - National Operations 477,483 549,176 Designated funds (National Operations): • Revaluation fund 136,364 45,829 • Tangible fixed assets fund 448,645 465,121 • Restructure fund 52,732 125,089 637,741 636,039 Restricted funds (Regions and Networking groups): • Revaluation fund - (1,078) • Income and expenditure account 1,444,377 1,327,023 1,444,377 1,325,945 Total funds & reserves 2,565,029 2,516,849
Independent Auditor’s Statement to the members of the National Hairdressers’ Federation Limited - 31 December 2012 We have examined the summary financial statements for the year ended 31 December 2012 which comprise the summarised income and expenditure account and the summarised balance sheet set out on pages 12 & 13. Respective responsibilities of the NEC and the Auditor The NEC is responsible for preparing the summary financial statements in accordance with United Kingdom law. Our responsibility is to report to you our opinion on the consistency of the summary financial statements with the full annual financial statements. We conducted our work in accordance with the Bulletin 2008/3 issued by the Auditing Practices Board. Our report on the Federation’s full annual financial statements describes the basis of our opinion on those financial statements. Opinion In our opinion the summary financial statements are consistent with the full annual financial statements of the Federation for the year ended 31 December 2012. Buzzacott LLP Statutory Auditor 130 Wood Street London EC2V 6DL Date: 22 May 2013
One Abbey Court Fraser Road Priory Business Park Bedford MK44 3WH
t: 0845 345 6500 or 01234 831965 f: 01234 838875 e: enquiries@nhf.info www.nhf.info