Hair Salons

Salons are hair to stay

Published: Tuesday, 17 July 2007 11:11:39
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Fantastic Sams Hair Salons has 174 franchises in Los Angeles, and at least 50% are minority-owned. That makes sense, given the city's diverse population. The company has a similar goal as it tries to break into the New York City market.

It's not just diversity that drives Fantastic Sams. It's business strategy. Industry studies show that Hispanics and African-Americans are potentially a more profitable consumer market than whites because they frequent salons more often and tend to buy more products. Also, purchasing power for African-Americans, Asians and Hispanics has tripled to $2.2 trillion from $700 billion in 1990, and by 2050, minorities will represent 50% of the U.S. population, according to U.S. Census data.

"If we're not targeting minority communities, shame on us," says Scott Colabuono, chief executive of Fantastic Sams International Corp. of Beverly, Mass.

In one case, an African-American Fantastic Sams franchisee in Lawrenceville, N.J., diversified his all-white clientele by hiring two black stylists, spreading the word in his own community at church and basketball games and using more minority-targeted marketing materials in the shop.

"From September 2006 to May 2007, we had a $100,000 increase in revenue, and 75% of that bump came from new African-American clients," says the franchisee, Boynton Weekes.

Fantastic Sams is scouting for 60 locations across the five boroughs and another 70 in the region over the next five years, many in minority neighborhoods.

"We want to recruit franchisees who are in the communities we are targeting because insiders know how to get things done, they have street smarts, and they understand the culture of the community," says Mr. Colabuono, who is working with developers to identify real estate opportunities in New York.

Source: Crain's New York Business