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Hair Care Industry Recession Proof?


Regis Corporation closing up to 160 company owned stores!

The hair care and beauty industry was once thought of as a business that was almost recession proof.  After all, ladies isn’t it true, we will give up shopping, movies and lunch dates before messing with our beauty routines! But, this recession we are in seems to be showing it’s ugly face in the hair care industry as well.

This holiday came as a shock to some hair care salons in St. Paul and Minneapolis, who are reporting declines of up to 25% from last year. The impact is being felt as clients are cutting back not just on services but on their regularity of services as well. Regular, faithful clients are waiting longer in-between haircuts and colors. Also appointments for manicure, pedicures and waxing have been waning as well.

Teri Schneider, owner of 51st Street Hair Station, in an upscale Minneapolis neighborhood, said her business dropped 20% last month from a year ago. She has been a hairdresser since the 1980s, charges an average of $45.00 for a haircut and said she has never experienced a dip like this one.

Michael Cole, owner of Talk of the Town in South Minneapolis, whose salon core is an African-American clientele also reports a 25% dip in business. Many of his 18-45 year old clients who use to come in weekly for a shampoo, blow dry and style, starting at $40.00, have cut back on this luxury. Some less frequent customers are giving up services all together.

Minneapolis based Regis Corporation announced plans last July to close up to 160 company owned stores because of the weakened demand on services. Regis Corp. has over 8,500 stores that operate under several names.

Hair Care Salon
Great Clips Minneapolis based hair care salon franchise

My good friend Ray Barton at Great Clips might be the be the beneficiary of some of those customer losses on the traditional hair care salon front. The Great Clips franchise, also based in Minneapolis, is a discount chain which seems to be picking up business from the fall-out of other higher priced salons. Haircuts at Great Clips average $12.00  It appears they are doing well in this economic downturn.

They announced their plan to expand by 300 stores to their existing 3000 salons nation wide by the end of 2009. Great Clips advertises to prospective owners, “What really makes this business concept unique is that it is recession resistant, simple and has steady growth; you will be hard pressed to find a better business that meets all three.”

Even though we are seeing deep discounts in retail everywhere, don’t expect to see price cuts in your hair care salon anytime soon. The rising costs and declining revenue hair care salons are faced with means most cannot cut prices and keep afloat. Julie Guzman, at The Beauty Lounge in St. Paul says, “My rent has gone up. My products have gone up. Getting to work has gone up but I haven’t raised my prices in three years because of the economy.”

Keeping up appearances rates high when it comes to protecting our feelings of well-being. Looking good equates to feeling good. Yeah, it’s not the ONLY thing that matters, but, a great hair style and color can go a long way to lifting spirits, especially when all else is crashing down around you.

  

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