Area beauty chain faces struggles
Elizabeth Grady school closes, salons confront trying times
Elizabeth Grady, a longtime Bostonarea 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.
Sandra Price, a project manager in Boston, has been a customer at Elizabeth Grady salons since 2017, buying pre-paid services like waxing for discounted prices to use throughout the year. When Price, 55, recently tried to reschedule an appointment at a Burlington salon, the phone went to voicemail and she received an automated response. Over a week later, she still hasn’t heard back.
“I was suspicious when I was calling last week and I couldn’t get through to anyone,” Price said.
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 auditors’ “refusal to certify [Elizabeth Grady Face First] as financially qualified to operate the school is arbitrary and capricious,” the company said in a lawsuit filed in Suffolk Superior Court.
The auditor’s office, when asked for comment, confirmed details of the case.
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.”
“It wasn’t fair” to the students, she said. “It wasn’t fair for me as their teacher. It broke my heart. I loved my job, I valued my students. They weren’t getting what they paid for.”
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.
In recent years, beauty products have been one of the retail industry’s strongest performing categories, despite COVID-19 and rising prices due to inflation.
But retail consultant DeAnn Campbell said the category is highly competitive and beauty brands like Ulta and Sephora that manage to penetrate mass retailers like Target and Walmart are best positioned to succeed.
What set Elizabeth Grady apart was the company’s decision to open a school, devoted to teaching students the latest science in skin care.
But the school has recently fallen on hard times, said LaPenna, the former teacher, now an assistant manager at another salon.
“I took another job before the closing in January because I could see the writing on the wall,” she said. “I thank my lucky stars I got the job I have now.”
Diane Chapin, a former student at the Elizabeth Grady school, said she saw the signs of financial trouble from the start. They needed specific supplies at specific times yet the supplies arrived late.
“We kept on running out of products,” Chapin said. “Sometimes we wouldn’t have any wax, and I would have a wax client, and I couldn’t do the service.”
Chapin also has not received her diploma, despite graduating in June 2023. As a result, Chapin said she hasn’t been able to take the state board exam and get her aesthetics license. She is now working as a bartender.
“I just hope everyone can transfer or just get their diploma and take their test,” she said, “so they can do what we went to school to do.”
‘I honestly loved my job, but I noticed it was unorganized. It just progressively got worse.’
LAUREN LAPENNA
Former teacher at the Elizabeth Grady school