ETS turns city into world's tanning-bed capital

Indianapolis Business Journal, Dec 17, 2007 by Olson, Scott

Indianapolis-based ETS Tan Inc. is the world's largest manufacturer of tanning beds, annually churning out twice as many as its nearest competitor.

Yet, the company founded in 1984 by Trevor and Edna Gray has plans to boost production, thanks to new ownership that has the financial clout to make it happen.

In August 2006, MH Equity entered the indoor tanning industry with the purchase of Sunshine Holdings, the umbrella company for ETS, Australian Gold and soft-ware provider Helios LLC. MH Equity is the private-equity firm launched by Conseco Inc. co-founder Stephen Hilbert and backed by home-improvement billionaire John Menard.

"MH brings a great deal of money, as well as the foresight to grow our business in this industry," said ETS CEO Bill Pipp, who declined to divulge company revenue.

ETS makes 24 models of tanning beds ranging in price from $1,000 to $34,000, for both residential and commercial use, from its 365,000-square-foot manufacturing and distribution center near Interstate 65 and Southport Road.

Roughly 200 people are employed at the massive facility, full of parts and pieces that assemble up to 35 standard tanning beds a day. One of its more interesting features is a salon in which workers can personally test the products before they hit the market. An upstairs showroom gives clients the opportunity to kick the tires before purchasing.

ETS has been at the forefront of industry advances that have evolved from beds to vertical booths to the latest innovation offering more than just a bronze tan. The company was the first to roll out a spa bed last December that uses light-therapy technology said to rejuvenate the skin. Two hundred such beds are in tanning salons, with another version to follow in February.

That one is being produced in partner-ship with Carlsbad, Calif.-based Photo Therapeutics Ltd. Using natural light, the bed is powered by a device the company says has been medically proven to stimulate the production of collagen, hydrate skin, and improve skin tone and texture.

Developed for medical use, the technology is approved by the U.S. Food and Drug Administration and is used in more than 150 hospitals in the United Kingdom, according to ETS.

FDA approval is required for an industry in the crosshairs of medical authorities who have warned for years that tanning can cause skin cancer. The American Academy of Dermatology and the American Medical Association both at times have called for a ban on the use of tanning equipment for non-medical purposes.

But some studies say moderate ultraviolet exposure triggers vitamin D synthesis in the skin and that lack of exposure to UV rays can create a vitamin D deficiency.

Labels on tanning beds provide FDA guidelines on recommended UV exposure, the power of the lamps and potential hazards. Further, the Helios software alerts salons when someone attempts to tan more often than suggested, Pipp said.

"I feel comfortable [that] what we provide is not only cosmetically pleasing, but that there are health benefits, too," Pipp said.

John Overstreet, executive director of the Indoor Tanning Association, lauded ETS as an industry leader.

"They're just an incredibly important part of what we do, because they are such an innovative and big player in the industry," he said.

The sector enjoyed considerable growth in the 1990s and into the early part of the new century. Sales since have leveled off, Overstreet said, prompting consolidation. Still, it is estimated that Americans spend $5 billion each year in salons.

The Grays moved ETS from Clayton to Indianapolis in 1988. It was initially a distributor, but in the early 1990s began making its own products, including tanning beds and lotions.

ETS Tan Inc.

Product: tanning beds

Address: 7445 Company Drive

Founded: 1984

Founders: Trevor and Edna Gray

Owner: MH Equity, a private-equity firm

Employees: 200

Web site: www.etstan.com

Source: ETS Tan Inc.