SkinSpirit Acquires Med-Spa Locations To Expand Its Reach Across The Country

The med-spa chain SkinSpirit is snapping up small aesthetic businesses with gusto as it extends its network of locations nationwide.

After buying Contempo Aesthetics in Pasadena, Calif., in June, SkinSpirit has purchased Truth + Beauty for an undisclosed amount. Founded in 2013 by Cori Goldfarb, star of Bravo TV’s 2015 show “Secrets and Wives,” the med-spa in Roslyn, N.Y., will soon be rebranded as SkinSpirit. Truth + Beauty represents the chain’s second location in New York.

With the latest acquisition, SkinSpirit reaches 39 locations throughout the United States. Founded in 2003, Palo Alto, Calif.-based SkinSpirit, which secured a minority investment from private equity firm KKR last year, has branches in Texas, Arizona, Utah, Washington, Washington, D.C., Maryland, North Carolina and Oregon along with California and New York. 

The med-spa chain has enlarged its footprint with a combination of organic growth and acquisitions. “We’re one of the only people of scale who have done some of both,” says CEO and co-founder Lynn Heublein. “There’s a lot of companies that have been equity-funded that are doing financial roll-ups where they buy smaller businesses and put them together. Then, there’s businesses like Ever/Body or Ovme, which as far as I know, have only done de novo.”

SkinSpirit started acquiring med-spa businesses in 2013 when it scooped up Calidora, a Seattle-based chain of three clinics. In 2019, it bought Lasky Laser Center in Beverly Hills, Calif. It took a pandemic pause and didn’t acquire again until this year. Generally, SkinSpirit will buy businesses when it’s interested in entering new markets or targeting specific demographics.

“We’re looking for a company that has a culture of excellence and focuses on great customer outcomes. I think that acquisition will be a continued part of our playbook, but not necessarily the main playbook,” says Heublein. “The economics usually are better to start from scratch, but there are some cases where acquisition makes more sense.”

A Proctor & Gamble alumnus, Heublein zeroed in on the burgeoning med-spa opportunity in 2002 after the U.S. Food and Drug Administration approved the use of Botox. A year later, SkinSpirit premiered. “There was no med-spa industry back then. We’re one of the very first,” says Heublein. “Our competitors at the beginning were plastic surgeon offices and derm offices.”

Breaking into the med-spa industry early has advantages. According to the company, SkinSpirit has become the country’s leading provider of Botox and dermal fillers. As a result, it boasts a high customer retention rate. Heublein pegs the figure to be in the 70% range compared to industry averages in the 40% to 50% range for Botox services. She declined to comment on company sales. American Med Spa Association estimates that single med-spa locations on average generated nearly $2 million in annual revenues last year, up from $1.7 million in 2021 and almost $1.53 million in 2020.

The U.S. med-spa industry has been surging as millennials and gen Z consumers seek out aesthetic treatments in greater numbers. There were an estimated 8,841 med-spas in the U.S. last year, up from 7,430 in 2021 and 5,431 in 2018, per American Med Spa Association. Women between the ages of 18 and 34 years old accounted for 26% of female med-spa patients last year. Women between the ages of 35 and 54 accounted for 52%. Globally, market research firm Grand View Research approximates the size of the med-spa industry at $16.4 billion in 2022 and projects it will advance at a compound annual growth rate of 14.97% from 2023 to 2030.

Heublein sees mothers bringing in their daughters for services like laser hair removal and targeted facials at SkinSpirit locations, and college students making appointments for laser hair removal, too. She says women in their 20s are patronizing SkinSpirit to create a filtered look with Botox and fillers rather than to prevent the signs of aging. SkinSpirit’s services also include body contouring and laser therapies. Prices in its locations run from $195 for facials to over $1,000 for treatments.

With crowding in the med-spa industry, Heublein isn’t convinced that every business will last. “There’s a lot of players that are coming in fast like cowboys, and they may or may not have all the i’s dotted and t’s crossed in terms of how you provide a safe, reliable service to the consumer,” she says. “I think that’s one of the benefits of 20 years of operation, we’ve really worked through that.”

Heublein predicts the med-spa industry will experience a wave of consolidation within the next year to 18 months. In 2022, American Med Spa Association estimated 81% of med-spas were single location businesses and 8% were part of a franchise operation. Meanwhile, investment has been pouring into the med-spa and facial bar space, giving larger operators the fuel to pick up smaller operators. SkinSpirit received investment from KKR after a minority investment from the private equity firm GreyLion in 2018.

Heublein says, “We’re not building to sell, we’re building to be a great national brand.” She adds, “When an industry’s hot, it’s easy to get funding. It can create a little bit of chaos in the market because companies may or may not be achieving their business models. Because they have equity, they’re funding their companies through that versus cash flow. Some of those companies are going to get to cash flow and some of those companies aren’t.”

In 2024, SkinSpirit anticipates holding steady on expansion as it manages its expanded fleet of clinics. “We’re growing at a pace that we can manage the business well,” says Heublein. “We can maintain our culture, and we can maintain the client experience and that’s kind of our North Star.”