From finance to follicles to fat. That's how entrepreneur Steve Hudson sums up the career that's brought him to his newest venture, running weight-loss chain Herbal Magic Inc.
Mr. Hudson's private equity firm, Cameron Capital Corp., is buying 40 per cent of the Toronto-based diet and nutrition company, which was founded in 1996. He won't disclose the financial terms of the deal, which includes a significant personal investment.
He'll also become the CEO, and in doing so, hopes to repeat the success of his past forays into the world of personal care - most notably, the turnaround of hair-loss firm Hair Club for Men and Women.
"They are different businesses, but the underlying principle is the same. You don't wake up one day and decide to get hair. You don't wake up one day and decide to get skinny. First you either have a health issue, a change in your workplace or your relationship, or another major life change," he said.
The presence of one of these factors, what he terms a "call of action," means customers are serious when they arrive and exceptional service must be easily available to them, he added.
His career in personal care is a long way from Mr. Hudson's roots as an accountant. In Canada he's still best known as the founder of financing company Newcourt Credit Group Inc., which was sold to New Jersey's CIT Group in 1999.
In the United States, however, his reinvention as a provider of beauty and personal care products is what has garnered attention.
The model for his latest project is his first venture into the sector, the turnaround of Boca, Fla.-based Hair Club. After taking the toupee vendor upscale, Mr. Hudson generated huge interest from bidders when he sold in 2004, and big profits for himself and other investors.
He fixed the company by getting rid of unproductive employees and increasing product quality. Most important was a sharper focus on customer service, which included Mr. Hudson standing at the door asking clients who did not buy what the company could have done differently to win their business.
Since then he's also purchased and renovated beauty salon and retail store chains.
Unlike Hair Club, which was in organizational disarray when he bought it, Herbal Magic is not a broken company, Mr. Hudson said.
Instead the diet chain, majority-owned by private equity firm Torquest Partners Inc. and its investors, has lots of room to improve. Mr. Hudson is bringing in his former Hair Club management team to guide the process.
With 350 stores across North America, Herbal Magic's program combines nutritional supplements, diet and exercise. Intensive one-on-one counselling sessions are the key, and something he wants to build on, Mr. Hudson said.
He'd also like to increase the company's profile and the public's understanding of its product to get more people through the door. It also needs a better online service, he added. There will be a number of challenges involved in running and expanding the business. As the recession deepens, many Canadians are struggling to keep up with their bills, let alone enroll in pricey weight-loss programs. While he intends to get rid of an upfront fee of more than $1,000, the plan will still cost $300 per month on a "pay as you go" system.
Claims made by the diet industry are also coming under increased scrutiny. Obesity experts have urged the government to create a system for evaluating and accrediting weight-loss programs, most recently in an editorial in the Canadian Medical Association Journal published yesterday. Products should be screened to meet government regulatory approval, the authors said.
This is a positive for the industry, Mr. Hudson said. All of Herbal Magic's products are already in the process of being evaluated by regulators in Canada, with approvals expected by 2011, he added. Demonstrating the same enthusiasm he's shown for his previous investments, Mr. Hudson, who has tried everything from a hair transplant to wrinkle treatments, has already thrown himself into his new venture.
Mr. Hudson said he won't just run the show at Herbal Magic - in fact, echoing the words of Hair Club founder Sy Sperling - he said he's already "also a client."
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