In the salon business, stylists are looking for ways to grow their clientele and create a personal brand without the pressures that come with operating a standalone shop. That’s where Salon Republic hopes to help. The Woodland Hills chain secures large retail spaces and then leases individual studios to beauty professionals – a sort of food court for personal grooming. The model has proved popular and the chain will mark its 10th location with the opening of a Woodland Hills outpost next month. Salon Republic also plans to expand its existing Beverly Hills location by adding five studios by the end of this month. “I’ve been looking to get into Woodland Hills for 15 years and now we’ve found a good location,” said chain founder Eric Taylor. “At Salon Republic, beauty professionals have control over their environment. What they get is the freedom that comes with owning their own salon.” The new salon at 20700 Ventura Blvd. will be the chain’s second San Fernando Valley location – its first opened when the chain was founded 16 years ago in Studio City – and will house roughly 50 studios. Currently, Salon Republic has six locations in Southern California, two in Texas and one in Colorado. Each building averages about 15,000 square feet and can accommodate roughly 50 to 75 individual studios. Each suite comes with a shampoo station, a styling chair, built-in shelving and cabinets for products. For a one-year lease, stylists are paying between $250 to $1,000 a week, the equivalent of $1,000 to $4,000 a month, depending on the location. Cyrus Bulsara, president of Plano, Texas-based Professional Consultants & Resources – a research company that specializes in the beauty and cosmetics industry – said salons have seen a dramatic shift in the past decade. Small family-owned independent shops used to dominate the industry, but now, studio and booth rentals are one of the fastest-growing segments, accounting for 37 percent of all revenue. “A major paradigm shift in the dynamics and functioning of the salon industry towards rentals continues,” Bulsara said in an email to the Business Journal. “Independent salons that once commanded 80 percent of the industry’s service revenues, as late as the early 2000s, now account for only 30 percent of all salon revenues.” Suite deals For stylists with an entrepreneurial flare, leasing a studio provides the opportunity to manage their own schedule and create their own ambiance without the overhead costs and responsibility of a standalone location. Barb Garcia-Grove, owner of Square Color Salon & Spa and Atelier by Square Salon in Las Vegas, said that running a standalone is indeed a challenge. “The risk is huge. We have a five-year lease with a five-year option and our lease is huge every month. We also have to worry about everything from sales tax to making sure each employee has insurance,” she said. “But at the end of the day we want to make sure our team is happy. … To us, our stylists are No. 1.” Salon Republic faces competition in the suite sector in Los Angeles as rivals have saturated the market. Similar concepts include Sola Salon Studios, a franchise based in Denver with more than 250 locations nationwide, including more than 55 in California, and Phenix Salon Suites, based in Colorado Springs, Colo. Phenix has 11 locations in Los Angeles – three of which are in the Valley in Glendale, Tarzana and West Hills. Taylor noted that his competitors are franchise modeled, in contrast to his company, which owns and runs the salons. “Their business model is to sell franchises, it’s not necessarily geared toward providing the best experience for the client or providing the best environment for (beauty professionals),” he said. Salon Republic caters to a range of professionals, including hair stylists, aestheticians, manicurists and more. In an effort to differentiate itself from competitors, each salon has a manger on site to welcome guests and oversee operations. The company has 25 employees. In addition, every Salon Republic is fitted with a beauty supply store on site, allowing stylists to purchase products in bulk and to resell them to clients at a profit. The stores carry brand-name products from Redken, owned by L’Oreal Group in New York; Wella Professional Products, owned by Procter & Gamble Co. in Cincinnati; and products from Unite Eurotherapy in London. “We want to carry what (salon professionals) use and offer it down the hall,” Taylor said. “Most products are less expensive here than at a beauty supply. We have a lot of stylists who pay rent from the profit they make selling product.” Celebrity style Taylor was introduced to the concept of salon suites nearly 20 years ago when he began working alongside Keith Clark, founder of Salon in the Plaza – a 52-room salon in Irving, Texas. By 1999, Taylor had moved back to Los Angeles and with the financial backing of his parents and bank loans, he opened the first Salon Republic in 2000 in Studio City. He did not disclose the chain’s annual revenue, but said Salon Republic broke even within its first two years. In 2012, the company received a $1.8 million commercial loan from Mercantile Capital Corp., a small business lender in Orlando, Fla., which allowed Salon Republic to expand to new locations. Taylor said he vets prospective tenants carefully. He looks at multiple factors including industry experience, creativity and if they have a deep and loyal customer base. “If someone is new or just out of beauty school, we encourage them to go to an open salon in a high-traffic area to develop a clientele,” he said. “We prefer a community of seasoned beauty professionals.” The chain is home to some high-profile beauticians, including Cherry Petenbrink, a colorist and beauty expert in Los Angeles. Petenbrink has rented space at the company’s Beverly Hills salon for four years. Prior to moving to Los Angeles, the stylist owned a 4,600-square-foot shop in Georgia called Shabangs, where she managed 30 employees for 10 years. “The commitment was so big,” she recalled. “When I transferred to L.A. for new opportunities and avenues in the industry, that’s when the suites started making sense. … You basically pay your rent, keep your inventory, book your own appointments and you have 24-hour access.” In addition to her salon, Petenbrink serves as a color consultant on film projects. She worked on the first “Hunger Games” film and she’s currently consulting on a movie starring Nicole Kidman and Reese Witherspoon. In addition to Petenbrink, celebrity stylist Frank Galasso, who works with stars such as Kim Kardashian, has been a longtime renter at Salon Republic’s West Hollywood location. One downside to the salon model, according to Las Vegas operator Garcia-Grove, is a loss of community. For some customers, a haircut without conversation isn’t as enjoyable. “Salons are a gathering place and now they’re breaking into individual rooms. I’ve heard of people going into studios and then leaving because they missed the camaraderie of their co-workers,” she said. “(But) the room is great for the seasoned stylist who wants that privacy and doesn’t want to be in the community environment.” Valley expansion Construction is underway on the chain’s Woodland Hills location and Taylor is confident the salon will be open for business in March. The 10,000-square-foot facility, previously a gym, is located in a shopping complex, which is typical of most of the company’s salons. Taylor said he is on the hunt for new stylists in the area and plans to attract them by emphasizing the freedom that comes with renting a studio. In the past, Taylor has approved even the most ambitious tenant improvements – tearing down walls to combine studios, installing automatic closing windows and hanging blow dryers from the ceiling. “We encourage them to brand themselves, and there are very few times when we say you can’t do that,” said Taylor. Joe Bruno signed his lease with Salon Republic in Beverly Hills last May. The owner of barbershop Bruno’s Chop Shop said he was looking into opening a stand-alone when he received a pamphlet promoting Salon Republic in the mail. “I was looking to open my own space and had been feeling discouraged by how much it costs,” he said. “The idea that I could get my own space with minimal overhead appealed to me.”
