ann

ual r

epor

t

>pg3 Introduction – putting membership at our heart

>pg4 Strength in numbers – why membership counts

>pg6 Making a difference – highlights of the year

>pg8 Your National Executive Council – working for you

>pg10 Regions set the agenda

>pg12 2012 – a year of transformation

>pg14 Summary of the fi nancial statements

//contents

Hairdressing is an energetic, youthful and fast-changing environment, and we have to be refl ecting that. Every salon owner has knowledge, enthusiasm and passion that we, as a Federation, must tap into and share.

Mark Coray – president, NHF

Hairdressing is an energetic, youthful and

Mark Coray – president, NHF

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03

Our Federation has come a long way in the past few years.Our Strategy For the 21st Century has made us a more modern and effective organisation; we have made great advances in the services and benefi ts we offer (such as discounts on PPL licences and legal, fi nancial and health and safety support, to name but some); within national operations, and in our regions we are developing more active, energised structures.

We are continuing to become more infl uential as a “voice” of the high street and are working more closely with government, policy-makers and other bodies within our industry. In a challenging economic environment, having the Federation behind you, it is increasingly clear, can make a real difference.

But there is still a long way to go. The fact we are the biggest single salon trade association gives us authority but also massive responsibilities. We have to make sure we wield what power we have in the most effective way possible, to lead with conscience and clarity and, most of all, to ensure we don’t stagnate and become an organisation that speaks only to itself rather than to the wider public.

This, I understand and appreciate, is not an easy message. Change is never without its painful decisions. But our biggest downfall, in my eyes, is that we don’t blow our own trumpet enough. We are, in many respects, the best kept secret of our industry; we are too internal. And that is something I want to see change, something that has to change.

Too often members are not encouraged to organise or even just attend events or meetings; information comes down second or third hand rather than because people are getting involved or passing on their knowledge, insight and expertise. We are not doing enough to bring on, enthuse and involve the younger generation of salon owners – salon owners who are, of course, the future of our industry.

Let me be clear, this is not – most defi nitely not – about discarding the talent, experience and sheer dedication of our older and mature members. If anything, in a period of change and transition, we need their wisdom and guidance more than ever.

No, what this is about is encouraging our existing, experienced members to make the time and effort to talk to, inspire and mentor younger members to come through.

It’s also got to be about encouraging new people to step up and join our Federation. To this end, the goal I have set our membership committee, to increase our membership by 10% over the next three years, is not just ambitious – although I feel it is eminently achievable – but also absolutely central to our future development and evolution.

Hairdressing is an energetic, youthful and fast-changing environment, and we have to be refl ecting that. We cannot afford to stay still or sit on the laurels of past achievements. Every salon owner has knowledge, enthusiasm and passion that we, as a Federation, must tap into and share.

Mark Coray – president, NHF

putting membership at our heart

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04

The economic downturn has highlighted the value of Federation membership for salon owners. To this end, attracting, retaining and supporting members has been one of the key priorities of 2011, and will continue to be a central theme of 2012.

Membership numbers reduced by 94 during the year, in part because of the diffi cult economic situation forcing more salon owners to call it a day and in part simply because of members retiring or moving on.

Against this backdrop it is easy to see why membership is, and has to be, such a priority for the Federation now and into the future, and why the drive to boost membership by 10% over the next three years was launched last summer.

The imperative, as president Mark Coray has stressed, is for the Federation to reach out more proactively to new and up-and-coming salon owners, to involve more members of all ages and to re-energise and revitalise the NHF’s membership base.

In July the Federation hired a business development specialist, Donald Northwood, on a six-month contract to identify the most successful communication methods to recruit and retain members.

His work highlighted the continuing importance of traditional communication such as mail-shots but also that the Federation should look at how it can harness new social media channels.

The challenging economic climate has, if anything, emphasised the value of being part of the NHF “family”; the access to legal, fi nancial and contractual support it offers to members, not to mention the benefi ts of being able to network with some of the best and most successful salons in the country. This, too, is a message the Federation will be looking to “sell” more proactively.

During 2011, for example, the Federation’s annual member satisfaction survey once again identifi ed NHF staff contracts as one of the most valuable benefi ts of membership, with nearly 60% of members who responded rating them as “excellent”, closely followed by Legal Lifeline, with 54% rating this as their most valuable member benefi t.

True to his desire to move the NHF forward from being the “best kept secret” within hairdressing, Mark demonstrated a proactive approach to external relations during 2011, being interviewed frequently in the press, on radio and TV.

The year kicked off with an innovative extension to the NHF’s existing CuttheVAT campaign with the launch of a report and campaign, Cut & Dried? The Case for a VAT Revolution for Hairdressing Salons.

This argued not just for a reduction in the headline rate of VAT but for a wholesale reform of how VAT is levied on small businesses to make it more fl exible and adaptable to the modern economy.

Although this campaign has yet to change minds within government, its sentiment – for VAT to be made more nuanced and responsive to the needs of small businesses – was picked up during the year by shadow chancellor Ed Balls as well as by other small business organisations, such as the Federation of Small Businesses.

strength in numbers, why membership counts

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The Federation was once again invited to offer its insight to the Low Pay Commission’sdeliberations on the national minimum wage (NMW).

It argued the wage was continuing to erode pay differentials between stylists and juniors, and so deterring salon owners from hiring junior staff and making it harder for young people to land their fi rst salon job. The Federation’s growing credibility and authority on this issue was recognised by the fact that the BBC’s fl agship current affairs programme Panorama subsequently interviewed Mark in October as part of a wide-ranging investigation into the NMW.

In the summer, the NHF made a formal submission to TV and retail “trouble-shooter” Mary Portas’ review of the high street, after Mary had been commissioned by the government to come up with ideas to “bring back the bustle” to British high streets.

The NHF put forward wide-ranging proposals, including ways to reform business rates, encourage more pedestrian footfall on high streets and improve planning decisions and

even proposed the creation of a National Lottery-style “high street good causes” fund.

The NHF’s magazine, SalonFocus, contributed SalonFocus, contributed SalonFocusto raising the Federation’s profi le by winning a national award (see overleaf) as well as working with national media to highlight ongoing concerns about the health and safety of chemical hair straighteners.

Internally, a major survey of members was carried out by the education committee to gauge views and perceptions on the future of hairdressing training and qualifi cations.

Published at the annual conference in October, this found salon owners were unclear about what many hairdressing qualifi cations actually meant in practice and were concerned some key skills – such as perming and reception work – are not being adequately covered in many colleges.

The survey, it is hoped, will act as a platform for the Federation to take a more hands-on role in the formulation of hairdressing education and qualifi cations.

We need to reach out more proactively to new and up-and-coming salon owners,

to involve more members of all ages.Mark Coray – president, NHF

We need to reach out more proactively

– president, NHF

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06

making a difference

Whether it was keeping members up to date with all that was happening in hairdressing or offering invaluable legal, employment and accounting support to help salons cope with the tough climate on the high street, the Federation remained active on many fronts during 2011.

SalonFocusUndoubtedly one of the highlights of the year was the NHF’s members’ magazine SalonFocus winning “Publication of the Year” at the Trade Association Forum’s prestigious Best Practice Awards in July.

The awards are designed to celebrate the work of trade associations around the UK and SalonFocus won in the most closely contested category, beating off competition from organisations such as the British Beer & Pub Association and the Recruitment and Employment Confederation.

The judges described the magazine as “a thoroughly good read with excellent informative, and occasionally amusing, content”.

Secretary general Eileen Lawson commented that the award was “a vindication of the Federation’s commitment to, and investment in, high-quality journalism and highlighted the growing importance and public profi le of the Federation”.

The magazine also saw the appointment of a new editor, Nic Paton, at the start of the year, although founding editor Andrew Don has been retained as an editorial consultant.

Legal LifelineIn the continuing challenging economic climate, the NHF’s Legal Lifeline remained one of it’s most popular benefi ts offered to members.

During 2011, it handled a total of 19,318 queries from members, of which the vast majority – 17,181 – were employment-related. Legal, payroll, health and safety, VAT and tax questions were other key reasons why members called the helpline.

The main queries when it came to employment issues – and so indicating the main worries pressing on many members – were conduct issues, absence and sickness, redundancy,terms and conditions and disciplinary issues.

Indeed, the continuing popularity of the service, with a minority of members being found to use the service excessively, meant the Federation took the diffi cult decision at the start of 2011 to implement a discretionary “cap” policy.

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07

This has meant anyone making more than 50 calls a year may be asked to contribute to their future use of the service.

To mitigate this change, head offi ce staff were given extensive extra training so that more queries can be dealt with directly and so may not need to be referred to the Legal Lifeline.

New tools for membersThe year saw the launch of a number of new, bespoke tools for members to add to the existing range of Federation benefi ts.

An online accounting system, called >Onlinebooks, was developed in partnership with accountancy fi rm Kingston Smith and, from November, a dedicated health and safety tool, Salon Sorted, was launched in conjunction with provider Sypol.

NHF Inspire and Team GBIt was another busy year for the NHF’s artistic team Inspire which was mentored throughout 2011 by the RUSH artistic team and led by artistic director Rebecca Dickenson.

The team was highly visible around the regions all year and demonstrated at the Federation’s annual conference in October.

Also in October, at Salon International, Inspire picked up a major accolade in winning the Your Hair magazine’s “Image of the Year” competition for an image taken from the team’s 2010 Sport Chic collection, a shoot sponsored by Fudge and carried out under the direction of that year’s mentor Sassoon.

For Team GB, led during 2011 by Wendy Harris, one of the highlights of the year was the achievement of one of its most junior members, Tayla Murdy, in becoming the youngest person to win gold at Organisation Mondiale de la Coiffure (OMC) Individual World Championships in Milan in September.

However, after a round of fruitless negotiations, the Federation on NEC’s recommendation decided to resign its membership of OMC, a move that took effect from 31 December 2011.

Photographic Stylist of the YearThe Federation’s 2011 Photographic Stylist of the Year competition in June proved to be a huge success and is rapidly becoming one of the highlights of the hairdressing calendar.

It experienced a fl ood of entries and keen interest from stylists of all levels, with entry numbers topping 150 for the fi rst time.

The artistic committee is already working hard on planning the 2012 event, which it is hoped will be equally popular.

The 2011 competition was won by Benjamin Madle, from Headhunters salon in Woking, Surrey.

British Hairdressing AwardsNHF member salons dominated the 2011 British Hairdressing Awards held in November.

Akin Konizi of HOB Salons was British Hairdresser of the Year, while Junior Green was Afro Hairdresser of the Year and Jasmine Redstone of RUSH Hair in Croydon was Newcomer of the Year.

Other salon winners included Marc Antoni, The Colour Room, Room 97 Creative Hairdressing, Ken Picton and Rainbow Room International.

However, the 2011 British Open Championships proved less of a success than in previous years, attracting fewer entries across competitions in front of fewer spectators.

This will in 2012 therefore be replaced by the Federation’s brand new competition, Britain’s Best, about which there are more details on pg12.

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// Mark CorayNHF national president

// Paul CurryNHF national vice-president

// Jeffery BonnHonorary treasurer

// Michael ThornhillYorkshire region

// John ArmstrongEastern counties region

// James BeattieWelsh region

// Nikki BooneSouth west region

// Linda Cornell (until Oct 2011) Eileen Clough (from Oct 2011)North west region

// Avril WalkerNorth east region

// Joe Cownley (until Oct 2011)Matt Bridger (from Oct 2011)Central england region

// Glynis ElliotSouthern region

// Ann GoddardWest of scotland region

// Dorrell HarrisonEast midlands region

// Agnes LeonardEast of scotland region

// Audrey MorganLondon region

// Alan RapkinLondon region

your national executive council...

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09

...working for you

The absence through illness for the majority of 2011 of secretary general Eileen Lawson inevitably had an effect on national activity and strategy.

Nevertheless, the executive and staff continued to work towards the implementation of Strategy for the 21st Century.

The year, for example, saw the NEC hold its fi rst strategic away-day, with the focus fi rmly on identifying short-, medium- and long-term strategic objectives to feed into the Federation’s wider business plan.

Key activities included the education committee’s members’ survey into hairdressing qualifi cations and education (see pg4), the results of which were presented at October’s annual conference.

The joint executive and fi nance committee focused on issues such as fee income and collection, management accounts, Federation business planning, investment, VAT and central treasury and lobbying issues.

Meanwhile, the British Open Championships, Team GB and NHF Inspire were among the priorities for the artistic committee.

John Armstrong, chair, education committee“The committee’s survey on education and qualifi cations was undoubtedly the highlight when it came to 2011. The response rate was high and the analysis confi rmed concerns we had long suspected around the complexity of current qualifi cations and that many members feel qualifi cations are often not ‘fi t for purpose’. Looking forward, we are now working with Habia and developing stronger relationships. It is, inevitably, a slow process but one that is hugely important to the future of the industry. Moreover it is important an employer-led body such as the Federation is taking the lead on this.”

Alan Rapkin, chair, membership committee“The membership drive the committee embarked upon during 2011 is going to be absolutely critical. To go forward as a Federation we, very simply, have to recruit new members. The appointment of a person at head offi ce dedicated to new membership issues is also a defi nite step forward and will, I expect, really accelerate progress in this area.”

Avril Walker, chair, conference committee“Having Lee Stafford demonstrate at Newcastle was a real buzz, as was seeing Team GB in action, while the talk on keeping your business customer focused given by Julie Eldrett was informative and illuminating. The other highlight for me was the survey we conducted about what sort of

conference members would like to see in the future. It showed members were keen for there to be more activities and more variety. We’d like to see members’ day continuing to become more of an ‘event’ in the future.”

Paul Curry, chair, joint exec. & fi nance committee“The ongoing move to streamline the fi nancial systems of the Federation and its regions was, for me, the most important development for JEF during 2011. It has made a huge difference to be able to bring everything under the one umbrella. It has made the Federation more effi cient (for example through the introduction of business charge cards for individuals) and, just as importantly, fi nancially more transparent. Moreover, it has taken some of the pressure off regional treasurers because they no longer have to do local audits.”

Audrey Morgan, chair, artistic committee“It was a good year, even if a challenging one because of the decision to withdraw from OMC. For Inspire being mentored by RUSH was a huge privilege and the team got a lot from it. The work that has gone on to develop and now launch Barbers’ Elite has been terrifi c, too. We developed a great foundation during 2011 from which we are confi dent we can progress and grow.”

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Membership activity across the NHF’s regions remained vibrant during 2011, with an array of shows, demonstrations, competitions and events being held up and down the country.

West of Scotland kicked off the year with a discussion in January on the pros and cons of chair renting, organised along with Glasgow-Lanarkshire networking group.

The event saw presentations by NHF secretary general Eileen Lawson and offi ce manager Tina Beaumont, with much debate focused on the benefi ts of members switching to a bespoke, standard NHF contract for chair renting.

North East region hosted the Federation’s annual conference and general meeting in October in Newcastle, including demonstrations from Lee Stafford, NHF Inspire and Team GB as well as a talk by business expert Julie Eldrett, who was a regular speaker in the region during the year.

The region held its annual championships in April, attracting 125 entries and more than 200 spectators, with two new competitions being introduced: two-tone colour and a salon team event.

For the North West region the highlight of the year, once again, was the Blackpool International Hairdressing Championships in March.

Other notable activities included the election in October of Eileen Clough, secretary of Blackpool networking group, on to NEC, with the region’s Linda Cornell in turn standing down.

Wahl artistic team member Martin Fox presented a sell-out demonstration in March for Yorkshire Region, giving a highly innovative display of gent’s clipper work.

Another highlight was the Yorkshire Hairdressing Championships in November, which was attended by 40 competitors and more than 150 spectators.

Central region in May held its fi rst ever Hairdressing Academy Awards, an event designed to promote its new Central England Academy and which was judged by Lee Stafford and Patrick Cameron, who also demonstrated.

Matt Bridger, chair of Birmingham networking group, was voted on to NEC in October, returning to the council after a gap of three years, while in turn the region’s Joe Cownley stepped down.

regions set the agenda

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Lee Stafford demonstrated for East Midlands region in June, with the region in October also hosting NHF Inspire.

Wales region saw the return of the Welsh Newcomers Hairdressing Championships in Cardiff, after a gap of more than 11 years.

The event proved a huge success, with Welsh president Lloyd Griffi ths vowing to expand it for 2012. The region was also the venue for the British Open Championships in June, which were held in Cardiff.

A series of one-day business events for London region was launched in September and covered issues such as health and safety, front-of-house, innovation, retail, exit strategies, chair renting, and managing talent.

Speakers at the September event included Vanda Bell-Preston of Sypol, the provider of the Federation’s new health and safety tool Salon Sorted and salon owner, retail expert and zoo keeper Mikaela Martin, who spoke on front-of-house image, good communication and effective strategy.

Southern region hosted the Sassoon team at the end of February, which demonstrated to a packed audience in Bournemouth, including a two-hour insight into their Neue-Kraft collection and a demonstration by creative director Bruce Masefi eld.

Another highlight was the South of England Championships in Southampton in November, which attracted some 80 competitors and an audience of 150.

In the South West region, Avon networking group held a popular “Style, Inspiration and Motivation” evening in April, attracting 250 people and included demonstrations from representatives from NHF Inspire and Team GB.

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It is not just the Olympics and the Diamond Jubilee that will mark out 2012 as special. The NHF will be undergoing signifi cant reform, too.

If 2011 was busy, 2012 is set to be a year of transformation for the NHF, driven by the return of secretary general Eileen Lawson.

The fi rst four months of the year has already seen a major restructuring of head offi ce, with the focus, once again, very much on member issues and membership development.

Assistant secretary Stephanie Munno has moved into a role of director of membership development, working with a freshly recruited team on new membership initiatives and strategies. She is also overseeing the relaunch of the Federation’s website www.nhf.info and investigating how the NHF can benefi t from new social media channels such as Facebook and Twitter.

Offi ce manager Tina Beaumont, meanwhile, has become director of member services, administration and operations, with a remit to focus on existing member services, delivery and standards.

Management accountant Simon Thomson, in turn, has taken on an enlarged fi nance director role, encompassing HR, health and safety and facilities management as well as fi nance.

Alongside this, the Federation has committed to carrying out a governance review during 2012, in which the effectiveness and performance of each standing committee will be evaluated.

There will be a lot to look forward to on the artistic front, too. NHF Inspire team manager Rebecca Dickenson stood down in February, and has been replaced by Colin McAndrew, owner of the Medusa Hairdressing chain in Edinburgh. Inspire will in 2012 be being mentored by the Trevor Sorbie artistic team.

2012 will see the arrival of the NHF’s new barbering team, Barbers’ Elite, which held its inaugural event – for NHF Solent networking group – in January. The team is being headed by NEC member James Beattie, owner of Beattie’s & Co. in Brynmawr and Abergavenny.

But the highlight of the year is set to the NHF’s major new competition, Britain’s Best, which will be held in November in Birmingham.

2012 a year of transformation

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The competition has been launched in the wake of the Federation’s decision to withdraw from OMC as well as a disappointing British Open Championships in 2011. It is aiming to fi nd “Britain’s Best” stylists, barbers and salon owners and celebrate the work of many otherwise unsung contributors to the trade, such as receptionists, students and lecturers.

The show will include a fl oor competition, a text-based Popularity Poll and an innovative photographic competition called the “Click & Send” Head of the Year.

More locally, but potentially equally important when it comes to the Federation raising its profi le at grass roots level, was the launch in February of a regional artistic team, called Fusion, by NHF Avon.

The team will be demonstrating at schools and colleges around its region during the year, and its progress is set to be watched closely by other regions.

Work is also continuing apace on raising the Federation’s national profi le.

In May, a tie-up was agreed with Creative Head magazine to publish a monthly page of NHF-branded news.

And in February president Mark Coray, vice-president Paul Curry and NEC members Nikki

Boone and James Beattie attended an intensive “media skills” training day at NHF head offi ce.

The event was run by ex-BBC presenter Christopher Slade, documentary maker and cameraman Mike Ford and SalonFocus editor Nic Paton, and involved role-play and tuition in handling TV and press interviews as well as tips and advice for more effective and authoritative public speaking.

More widely, the NHF has forged links with Bedford Conservative MP Richard Fuller, who has pledged to work as an advocate for the industry and the Federation has begun working with a specialist Westminster PR fi rm to promote its messages better within Parliament.

The ongoing value of NHF membership was highlighted in March in the Budget when chancellor George Osborne announced he would be tightening up the VAT treatment of chair renting, a move that, in effect, has made the NHF’s standard chair renting contract the de facto template for salons that wish to chair rent.

Finally, along with continuing activity around VAT, the national minimum wage and education, the NHF will in particular be focusing during 2012 on highlighting how the specifi c needs and concerns of micro-businesses (as opposed to small and medium-sized fi rms) are not being well enough recognised by the government.

2011 2010

Income £ £

Members fees 1,205,399 1,111,267

Insurance commission 115,218 110,865

Sales to members 52,778 49,493

Competition and seminar income 52,367 57,017

Magazine advertising and sponsorship income 64,712 112,882

Investment income and interest receivable 23,480 23,016

Other income 23,041 22,317

Total Income 1,536,995 1,486,857

Expenditure

Direct membership services 394,966 445,908

Cost of sales to members 7,589 14,938

Meeting expenses 149,094 145,505

Affiliation fees and subscriptions 27,495 33,562

Competition expenses 89,477 79,691

Publicity and promotional costs 131,386 150,262

Honoraria 38,710 38,290

Staff costs 345,457 320,375

Premises and office equipment costs 117,634 86,241

Administration costs 117,693 121,547

Irrecoverable VAT 31,615 26,925

Insurance premium tax 6,641 6,005

Total Expenditure 1,457,757 1,469,249

Surplus for the year before exceptional items 79,238 17,608

2011 2010

£ £

Surplus for the year before exceptional items 79,238 17,608

Exceptional items

Reduction in VAT refund due from HMRC (15,045) -

Reduction in VAT repayable to members - 90,881

Share of VAT unclaimed by members 111,478 -

Surplus for the year after exceptional items 175,671 108,489

Realised gain on listed investments 2,089 4,518

Unrealised (losses) gains on listed investments (44,628) 65,830

Surplus for the year 133,132 178,837

Balance brought forward at 1 January 2011 2,383,717 2,204,880

Balance carried forward at 31 December 2011 2,516,849 2,383,717

National Hairdressers’ Federation Limited Summarised Income & Expenditure Account for the year ended 31 December 2011

Financials 1>pg

14

2011 2010

£ £Fixed assets Tangible assets 465,121 481,284Investments 1,097,831 728,969 1,562,952 1,210,253Current assets Stocks 31,198 32,775Debtors 102,659 130,381Short term deposits and cash at bank 924,113 1,267,450 1,057,970 1,430,606Creditors Amounts falling due within one year (104,073) (102,053)Net current assets 953,897 1,328,553 Provision for liabilities and charges - (155,089)Total net assets 2,516,849 2,383,717 Represented by: Capital, funds and reserves Share capital 5,689 -General funds: • Income and expenditure account - National Operations 549,176 520,423Designated funds (National Operations): • Revaluation fund 45,829 96,543• Tangible fixed assets fund 465,121 460,463• Restructure fund 125,089 - 636,039 557,006

Restricted funds (Regions and Networking groups): • Revaluation fund (1,078) -• Tangible fixed assets fund - 20,821• Income and expenditure account 1,327,023 1,285,467 1,325,945 1,306,288 Total funds & reserves 2,516,849 2,383,717

Independent Auditor’s Statement to the members of the National Hairdressers’

Federation Limited - 31 December 2011

We have examined the summary financial statements for the year ended 31

December 2011 which comprise the summarised income and expenditure account

and the summarised balance sheet set out on pages 14 & 15.

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 2011.

Buzzacott LLP

Statutory Auditor

130 Wood Street

London

EC2V 6DL

Date: 20 May 2012

National Hairdressers’ Federation Limited Summarised Balance Sheet as at 31 December 2011

Financials 2 >pg

15

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