Hair Industry Overview

Topics: Hairdressing, Hairstyle, Beauty salon Pages: 4 (1327 words) Published: November 10, 2012

This is a report on hair service industry. Salons and shops in this industry can be privately owned, franchised, or a chain. According to HOOVERS, In the US, about 70,000 hair care salons (65,000 beauty salons; 5,000 barber shops) generate combined annual sales of about $19 billion. The top major companies are Premier Salons, Ratner Companies, Regis Corporation, and Sport Clips. The industry is highly fragmented: the 50 largest companies generate about 15 percent of revenue. The beauty salon industry performs basic services such as haircuts, coloring, and styling; but many are expanding to include spa like services like facials, tanning, and nails. INDUSTRY OVERVIEW

The service industry for hair has long been made up of mostly small privately owned shops. The SIC Code for Beauty Shops/Salons is 7231 and the NAICS Code is 812112. In the later part of the twentieth century this industry started to see the growth of chain salons. These chain salons often operate on a franchise basis and are usually located in shopping malls. According to Hoover’s, there are 70,000 hair salons in the United States that generate combined annual sales of about $19 billion and employ 760,958 people. Most of these shops were considered small and employed less than 5 people. This industry is highly labor intensive. The average revenue per employee is less than $45,000.

In a beauty salon that is privately owned, the owner is most likely a female and an active hairdresser in the salon. These salons are usually geared towards women and offer services such as manicures, facials, and massages, in addition to traditional hair services. The other services are important to generate additional income to the salons.

Hair salon chains and franchises usually market their services towards families, instead of women only. Because of this they also have a clientele of men and children. These salons usually staff a large number of stylists and only offer basic services...
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