Hair down: Salons, barbershops and spas in the Capital Region and across the country report a ‘dramatic slowdown in customer traffic growth.’
Beauty has fallen on tough times in Baton Rouge.
After experiencing a decade of double- and triple-digit growth, barbershops, beauty and nail salons, and spas have declined in number in the Capital Region since the economic downturn began in 2007.
On some fronts, it appeared the industry was recession-proof. A recent U.S. Census Bureau survey of the smallest businesses in the nation showed that neighborhood barbershops and beauty salons were one of the bright spots in an otherwise dismal era for mom-and-pop businesses, growing 8% between 2008 and 2009.
The industry was one of the few to register growth during the tough economic climate. And the number of barber licenses across the country has been rising, according to the Association of Barber Boards, from 190,000 in the 1980s to about 250,000.
Even in New Orleans, where hundreds of such shops and salons were lost to Hurricane Katrina in 2005, more than 1,500 beauty salons opened between 2004 and 2009, an increase of 50%. The number of barbershops jumped 11%.
But the Professional Beauty Association’s Salon/Spa Performance Index for the third quarter of 2011 fell to its lowest level in two years, marking a second consecutive quarterly decline. The quarterly composite index tracks the health of and outlook for the U.S. salon and spa industry.
Salon and spa owners in Baton Rouge and elsewhere are reporting softer service and retail sales, as well as a “dramatic slowdown in customer traffic growth” in the third quarter, the association says. In the United States, about 70,000 hair care salons—65,000 beauty salons and 5,000 barbershops—generate combined annual sales of about $19 billion.
“While the third quarter is typically slower for many salons and spas due to the summer holiday season, the trend results from the Salon & Spa Performance Index are discouraging,” says Steve Sleeper, executive director of the Professional Beauty Association.
“We continue to increase our array of business education to help owners through these challenging times and better position themselves for the future.”
To stay ahead of the economy, Paris Parker Aveda Salons & Spas, which has four locations in the Baton Rouge area, five in New Orleans and three on the Northshore, has implemented a strategy concentrating on best practices that will continue to drive its business based on what it learns from the latest industry research.
General Manager Andi Eaton says the company has shifted its services and pricing practices. Two years ago, the company began offering spa experiences starting at $35. For that price, for example, customers could get a brightening facial treatment, a service that typically costs about $85.
Just this quarter, the salon introduced special pricing on slow days (typically Mondays and Tuesdays), offering spa services at a “value” price. Guests who want the spa experience can still afford it without spending the amount of money they would later in the week.
A year ago, Paris Parker Salons created a “series” package, in which guests can buy six services for $300, so they can come in for six months to enjoy a service at a cost of $50 per visit—the amount that industry research indicates customers these days are comfortable spending each time they go to the spa.
With such packages, Eaton says, Paris Parker was able to retain customers who might otherwise have decided they could no longer afford such a luxury. The company did the same with its hair styling and color prices, hiring more artists at lower price points, so the high-end salon now offers haircuts starting as low as $25.
“We’ve really experienced a continued success coming out of this past year,” Eaton says. “We certainly aren’t running 20% growth like we would have been three and four and five years ago. But we have been able to see increases in all of our locations and good increases in our locations as well.”
She suspects smaller, independently owned salons—the ones the Census Bureau indicated were on the decline in Baton Rouge—weren’t able to make similar adjustments.
“When salon guests had to make decisions about where they were going to put their dollars, in the case where they might have been spending $50 or $60 on a haircut, they realized they could be looking elsewhere,” Eaton says. “When the economy was better, people felt great about wanting to spend money on themselves and were doing so, and now they’re just making adjustments and definitely looking at extending time between their services and where they can get a great service but at a better value.”
Eaton doesn’t expect a return to the days when clients will “feel good about spending $85 on a facial service” in the near future.
“There are certainly guests out there who will do that,” she says. “But as an industry, we have to be smarter about how we are putting together packages and setting up menus, because I don’t expect we’re going to go back anytime soon to people feeling like they have that kind of discretionary money to spend.”
One positive result of the current state of the industry, she says, is that women are going with a more natural, low-maintenance look that requires fewer visits to a stylist.
Rigsby Frederick, who owns Rigsby Frederick Salon Gallery & Spa on Perkins Road, has been in the industry for 27 years.
He has always believed that for a salon to succeed, it must be “ever changing. You have to be elastic. It is a market where you really have to give clients value for their dollar.”
Fortunately, he notes, they do have “a renewable need” about every six weeks.
But even with that, Frederick knows that guests have a choice. His focus has always been on positioning and branding himself in the market, a strategy that works well in good times and in bad.
The salon owner also emphasizes education. As other salons have struggled to keep their doors open, he just sent eight stylists to New York last month for additional training. He has more than 10 college graduates working for him.
Frederick knows tough times. He opened his salon in the 1980s, when the oil bust hit and much of south Louisiana fell on hard times.
“Now more than I can ever remember, you have to give people value for their dollar,” Frederick says. “And it’s about relationships. If you concentrate on relationships and being kind and taking care of people, money is a byproduct.”