Full-service or Fragmented?

Despite a recent closure of a longtime full-service salon, it seems the business of hair and nails is humming along.

On March 31, after more than 40 years in operation, the doors closed for the final time at Hair International in the Brentwood Shopping Center. According to Manager Cynthia Ingwerson, the salon fell victim to both age and increasing specialization in recent years.

“Our industry in the last decade has fragmented. You now see salons for children, salons for men, you see spas and nail salons, you see color bars – everyone has gotten so specialized in the industry,” said Ingwerson, whose mother purchased Hair International in 1973. “It is just not one-stop shopping anymore.”

Not everyone in the industry agrees.

Eileen Gabrielson started her full-service salon, Ashley Lauren Salon & Spa, two years ago after operating two salons in New York. She moved here with her Lamar-native husband four years ago and said she still believes in the full-service business model.

“I think most people want to do one-stop shopping,” Gabrielson said. “They don’t want to go one place for their haircut, then somewhere else for their manicure and then some place else for their pedicure.”

She said her strategy is to market her 4303 S. National Ave. salon and keep a well-trained staff. Though she declined to disclose revenues, she said business was up 25 percent in 2011 compared to 2010, and she expects revenues to grow by at least 35 percent this year.

“If you have a good staff and a good manager, the salon business is doing really well,” Gabrielson said.  

According to U.S. Bureau of Labor Statistics, job prospects for barbers, hairdressers and cosmetologists are increasing. Between 2010 and 2020, the industry is expected to grow by 14 percent, or about as fast as average job openings. In 2010, there were more than 700,000 barbers, hairdressers and cosmetologists, earning a median wage of $22,500 per year.

Lori Beard’s Vivo Salon LLC specializes in hair styling, and the owner attributes much of its success since opening six years ago to that single focus. She said sales suffered through the economic downturn, particularly in 2009, but they rebounded by 5 percent last year. First-quarter 2012 revenues have increased roughly 20 percent compared to first-quarter 2011, she said.

“Massage therapy and nails (are services) people are more willing to let go and do for themselves,” Beard said. “Hair is more of a priority.”

Hannah Catlett, who co-owns Studio 417 on West McDaniel Street with her stylist husband Paul, said salon revenues have increased each year since opening in 2002. She said total revenues for 2011 were up 5 percent compared to 2010, and in the first quarter this year, revenues are up 15 percent compared to the same time last year.

Catlett said she believes the company’s business model is strong. Its 14 employees aren’t independent contractors, but they work for the salon and are paid commissions – a philosophy that many in the area don’t follow. In fact, Ingwerson said employee taxes were a drag on Hair International, until in recent years the salon attempted to convert to the independent contractor model.

The other part of the downfall of Hair International, Ingwerson said, was that the lease and overhead costs at the 2,400-square-foot salon were too great for the amount of business it was taking in and, perhaps even worse, it was dated aesthetically.

“We could not get [new] staff to come on board because of the dating of the salon. It was old. And the younger stylists, they want to go to some place that is hip and happening. They don’t want to go to an old-lady salon to start their careers,” Ingwerson said.

Jacqueline White, Ingwerson’s daughter and Hair International co-owner, said salon product and service revenues peaked in 2006 with $360,000, before declining by double-digit percentages the last three years.

At cosmetology school The System, a Paul Mitchell Partner School, three out of four graduating students were placed into jobs last year – many as independent contractors who went to full-service salons, according to co-owners Greg and Stephanie Kellogg. They say student enrollment is holding steady, though its graduate numbers were down slightly to 145 last year, from 152 graduates in 2010. The school’s first graduating class was 124 in 2005.

Stephanie Kellogg doesn’t think the closure of Hair International is a reflection on the economy or changing trends.

“It’s like anything else, those salons that aren’t offering the right service at the right price are going to find themselves out of business,” she said.

All but two of Hair International’s 21 employees have accepted area jobs in the industry, said Ingwerson, who now works for Silhouette’s salon.