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Discount salons thrive as beauty goes budget

By M.S. Enkoji

McClatchy Newspapers

Published: Tuesday, May 26 2009 12:00 a.m. MDT

Aidan Flores-Hartin, 8, left, checks out his new hairstyle with stylist Tarsha Thomas at Great Clips in Sacramento, Calif.

Renee C. Byer, MCT

SACRAMENTO, Calif. — In a beauty salon bustling with an evening crowd, Molly Flores headed in to a place she's gotten to know well. The Tahoe Park, Calif., legal secretary and mother of two used to shell out $65 for a haircut. Then the economy squeezed the luxe out of her budget.

"It was the first thing to go, and it's too bad, because it was my only real luxury," Flores said. "It didn't seem like a large sacrifice, though. It can go for gas and groceries."

Flores, who brought her 8-year-old son into a Great Clips in east Sacramento recently, now gets her own hair cut at the chain salon, too. Her cost: $13. The beauty industry is notoriously resilient, holding steady during wars and even recessions — except for this one.

Overall, spending on beauty products, makeup, hair care and perfume has fallen nationwide, down 2 percent from 2007 to 2008, according to researcher NPD Group Inc. So-called "prestige" products tumbled 3 percent, while beauty-product sales at food and drug stores stayed virtually the same.

And now, more people like Flores, 33, are heading "down market," hoping to trim as much as $30 or $40 out of the cost for a haircut. That's creating a surge at discount hair salons, making them one of the few winners in a battered economy.

"It's a really great industry. It's almost recession-resistant," said Alan Storry, vice president of franchise development for Minneapolis-based Regis Corp., the world's largest salon company, with 13,000 locations of Supercuts, Cool Cuts 4Kids and other brands. There are more than 20 Supercuts in the Sacramento area.

The cutback on high-end styling is a key reason why low-cost hair chain Fantastic Sams isn't curtailing its growth, despite the economy.

The Beverly, Mass.-based company, with four franchised operations in the Sacramento area, opens up to 80 new stores a year. It's on track for a similar number this year, including at least two in San Joaquin and Stanislaus counties, according to Jeff Sturgis, vice president of franchise development.

"People are saying, 'I'm spending more money than I need to. How do I do this less expensively?' " Sturgis said. "Obviously, people still need to get their hair done."

Fantastic Sams has 1,325 salons nationwide, 225 in California.

The typical store employs eight to 10 stylists and charges $15 to $20 for basic haircuts and $30 to $75 for other services.

At the east Sacramento Great Clips, Cecelia Savage's chair never seems to sit empty. Her arms always seem airborne, hovering over one head after another.

A barber for 33 years, Savage said her regular customers are still coming in — but many are lengthening the time between visits. She's also seeing new customers bringing in money-saving coupons.

"Coupons have been our biggest thing," she said. "It lets people know we're here."

For higher-end, independent salons, the exodus of clients has been brutal.

Kari Coulston, a color specialist at Sculptures Salon and Spa in Folsom, Calif., lost half her business a year ago, as customers opted to do their own hair.

Though she suspects some of her female customers are opting for chain salons instead of a $50 haircut, they aren't about to let her know, she said. "Some of them are prolonging the time between appointments," Coulston said.

"If they came every six weeks, now it's every 10 or 12 weeks. Either way, it dips into my pocket."

But business seems to be picking up. Customers have started returning, and her sales recently are up to 75 percent of her pre-recession receipts.

"I'm very positive about the way things are coming around," she said.

Stretching the time between visits to a hairstylist is the dominant trend of the recession, said Erika Maschmeyer, an analyst with Robert W. Baird & Co. who tracks Regis Corp.

The typical Regis salon customer spends less than $200 a year on hair services, she said. That could be the price of a single visit to a higher-end salon.

Sturgis of Fantastic Sams said the crucial difference between high-end independent salons and discount is in the overhead.

"We're just not paying $50-a-square-foot rent in a high-end neighborhood or lifestyle center. We're in grocery-store shopping centers," he said.

Still, making headway in the industry is no easy chore for a company like Fantastic Sams, Sturgis said. Fewer than 20 percent of salons are affiliated with a chain, he said.

A key to the future will be retaining new customers once the economy rebounds. But that could be a tough sell, particularly for women, said Maschmeyer, the analyst.

"Americans, by nature, are aspirational," she said. Men, who visit more frequently but pay less, tend to be less loyal to stylists, she said.

Women generally are more selective, and chains would have to overcome a reputation for employing less-experienced stylists who move on after a few years, Maschmeyer said.

Flores, who admired her son's neat, close-cropped cut, said she is looking forward to better times, when she can return to her old hairdresser.

"Yes, I'm going back," she said. "I just need someone who knows my hair."

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