Universal Cos. Inc.
(Small Business Success Story of the Year - Southwest Virginia Finalist)
Founder’s sales pitch to suppliers saved the company

by Jack White
for Virginia Business
February 2006

Imagine that you and your business partner have just split, cash is short, and you want to rebuild what’s left of your part of the company. That situation faced Marti Morenings, founder and CEO of Universal Cos. Inc., an Abingdon-based supplier of spa industry products, six years ago.

In the split, Morenings kept the company’s catalog, customers and suppliers. But she needed money — a lot of money — to keep the business going, and feared it would be difficult to borrow that much from a bank. So Morenings started calling her suppliers. The message was simple: It may be six months before I can pay you, but if you will work with me, we can develop a partnership that will benefit us both. That ultimate feat of salesmanship was the beginning of today’s larger and more versatile corporation, which has evolved from simply a supplier of skin care and spa products into a consultant and international distributor in the burgeoning $15 billion health spa industry.

While remaining an industry leader for spa supplies, the company also partners with clients to help them develop new products and provides new spa owners with advice to get their businesses going. Universal’s catalog offers more than 5,000 items, including apparel, linens, equipment and furnishings. Morenings is proud of the key role her company played last year in supporting legislation that, for the first time, requires skin estheticians (people who give facials and provide many skin-care services within the spa industry) to be licensed and certified in Virginia.

She likes to tell about two “light bulb moments” with the private company she founded in 1982, at age 22. The first moment came when she decided to quit manufacturing the product that got her started, a motorized massage table. Instead, she began selling other people’s products. “I decided that I am best at marketing,” she says. “Let them make it, and I’ll sell it.”

The second moment was when she realized the power of partnering with the people that her business served. In Universal’s case, it is the 500-plus suppliers who enable the company to serve more than 23,000 customers in countries as far away as Canada, Mexico and the Caribbean.

Universal began in a back room of the Bristol, Va., chiropractic office of Morening’s father, Dr. G. H. Morenings. The business expanded at that location until two years ago when it moved to a $6 million corporate headquarters near Abingdon. Company reserves plus loans from two banks financed the expansion. The 10-mile move gave Universal a stunning new office and call center joined to a state-of-the-art distribution center. The move also prompted the need for more employees, and Universal nearly doubled its staff of associates to 100.

The company plans to continue its growth from this one Southwest Virginia location. President Gary McConnell, who heads operations, notes that “We are closer to 60 percent of the population than at any other place in the country.” Plus, a partnership with United Parcel Service moves goods efficiently to Universal customers, at home and abroad.
Over the years, Morenings has seen the spa industry undergo dramatic change. In the beginning, Morenings’ products and services were therapy-oriented, an outgrowth of her father’s chiropractic practice and not unlike the traditional offerings of European spas. Customer-driven change in the United States, however, has morphed today’s spa into a place of quiet darkness with flickering candles, varied aromas and a long menu of facials, baths, wraps and massages. For some aging baby boomers, it’s the ultimate refuge for mental relaxation — a place to be pampered and to escape from stress.

In fact, most of Universal’s business comes from boomers and others who visit their neighborhood day spa. High-profile spas at resort hotels such as The Greenbriar, The Homestead and Asheville’s Grove Park Inn, represent less than 10 percent of the company’s business. Another 10 percent comes from the fast-growing field of medical spas, mostly owned by physicians. The largest share, more than 80 percent, comes from day spas, which are frequently mom-and-pop operations in a strip shopping center, or something more fancy.

Historically female enclaves, today’s spas increasingly attract male customers. As a result, some spas are being transformed with new decors and products. “Once men get past the embarrassment of going,” Morenings says, “they love it. Some industry people say men will represent half of all spa patrons in another two or three years.”

How does Morenings plan to handle this new client growth? “I certainly do not want to go public,” she says, “or even bring in new partners.” She thinks Universal’s 17 percent growth rate in 2005 can be sustained, even increased, by continuing to plow earnings back into the company and through judicious bank borrowing.

“The way we are doing it is fun, and I find it satisfying to help others succeed,” she says. “I don’t want to change that.”