It's You against Them

 

It is a fact of life that franchise operations and large companies have far higher chances of succeeding in the long run than small independent units. Statistics by the US Department of Commerce show that 95% of franchise operations succeed while only 25% to 35% of independent businesses do so.  Obviously this is true for the hairdressing industry not only in the US but also Europe and the rest of the world.

 

In the US and to a certain extent in Europe, large corporations have moved in to markets where small businesses were the norm and managed to squeeze them out. Restaurants, food markets, printing, coffee, Movie Theaters, car oil changes and tires, DIY stores the list is endless. The hairdressing industry firstly saw the consolidation of Beauty Supply Distributors and Wholesalers, Cash & Carry Beauty Supply stores and for some time now we have been seeing the beginnings of the establishment of giant salon chains. Regis Corporation in the US, are now buying salons as fast as they can. They now control over 9,300 salons worldwide. Some of the well-known names they control are Vidal Sassoon, Jean Louis David, Supercuts, Regis Salons and many more. Their sales in 2003 are estimated to reach US$3 billion.  They own salons in the US, Europe and Canada in shopping malls, department stores, strip shopping centers, high street locations and even within giant stores like Wall-Mart in the US.

 

Other giants such as, JC Penney Co., Magicuts, Opal Concepts, Toni & Guy, etc., even though not as big as Regis, nevertheless they all plan to expand as fast as they can. Hairdressing still remains one of the very few industries that the chains are not as dominant as in other industries. The situation will not remain as is for long. In the US chain dominance will come before Europe and the rest of the world. This, however, doesn’t mean that salons outside the US should rest on their laurels and do nothing. They still have to compete, survive and grow in the long term.