Elizabeth Grady struggles as beauty school closes

Elizabeth Grady, a longtime Boston-area beauty brand, school, and salon chain, is struggling to operate its business amid legal battles with its landlord and state regulators. The state’s Board of Registration of Cosmetology and Barbering sent a notice to students that it voted last month to close the Elizabeth Grady School of Esthetics in Medford. The school in 1975 was the first fully licensed aesthetician school in the country teaching students how to perform facials and massages, according to the company. “Students should prepare to transfer their completed school hours to a Board-approved aesthetics school,” the notice said. The board did not state a reason for its decision. A lawyer representing Kathleen DeNicola, listed in state records as president of Elizabeth Grady Face First Inc., did not return a call seeking comment. During a board meeting last September, DeNicola proposed moving the school, records show. The Globe called 11 salons the company operates in Massachusetts. Some stores did not answer. Employees at other locations said their salons will soon rebrand themselves. The company also has two locations in New Hampshire. Court documents suggest the company faces severe financial challenges. In 2021, Elizabeth Grady Face First sued the state auditor’s office and Division of Occupational Licensure: The latter agency declined to renew the school’s license because state auditors raised questions about the company’s financial statements and how it accounted for federal pandemic relief funds. The lawsuit claimed that the company had operated the school profitably for 40 years. Elizabeth Grady said its 2020 audited financial statements show it generated shareholder equity of nearly $10 million and approximately $700,000 in net income. The judge ultimately dismissed the lawsuit, a decision the company is appealing. Lauren LaPenna, who formerly taught at the school, said the company struggled with many operational problems. “I honestly loved my job, but I noticed it was unorganized,” said LaPenna, 34. “It just progressively got worse. My class didn’t have makeup kits or supplies.” In April 2023, Elizabeth Grady Properties, a firm that owns the physical space of the salons, sued Kathleen DeNicola and Elizabeth Grady Face First for failing to pay rent and real estate taxes. According to the lawsuit, also filed in Suffolk Superior Court, the company owed about $213,000 in unpaid rent as of November 2022. Elizabeth Grady Properties, owned by John Walsh, is also seeking to evict Elizabeth Grady Face First from the salons. A lawyer representing Walsh did not respond to a request for comment. The case is still pending. Elizabeth Grady has been a longtime fixture in the Boston beauty scene. In 1974, Joe Grady founded the company, named after his daughter Elizabeth, and opened the first salon on Newbury Street. The company distinguished itself by selling its own branded beauty products through its salons and website, including high-end serums, creams, and powders. — THOMAS LEE and ESHA WAILA