This category encompasses establishments primarily engaged in offering beauty or hairdressing services. It includes unisex salons as well as combination beauty and barber shops. Beauty and cosmetology schools are also covered in this category. Information concerning only barber shops can be found under SIC 7241: Barber Shops.
812112 (Beauty Salons)
812113 (Nail Salons)
611511 (Cosmetology and Barber Schools)
The service industry that has developed around hair care has long been dominated by small, single-owner neighborhood establishments. Only in more recent decades has this industry seen the growth of chain salons, which are usually part of larger, diversified parent corporations. Such corporate entities often operate outlets on a franchise basis. These chain-and franchise-based hair-dressing establishments are most often located in shopping malls.
There were 82,768 establishments in this industry, generating $9.9 billion in revenues, according to 1992 U.S. Census Bureau statistics. These beauty shops employed 387,249 cosmetologists and other workers. In 1997, there were 1,805 cosmetology and barber schools employing a total workforce of 10,289 and generating revenues of nearly $454 million.
For several years, Glemby International and Essanelle dominated the national chain-operated salon industry. Such outlets were commonly found in major American department stores under a variety of other names. In the late 1980s, however, such companies as Supercuts gained a significant foothold in this industry segment by offering discounted, no-frills services. The industry as a whole saw growth rates ranging between 15 and 20 percent during the late 1980s, as smaller salons targeted working women and larger companies opened numerous outlets that provided fast and low-budget hairstyling services.
Since the 1980s, the industry has diversified to target specific consumer trends, and companies filling these niche markets have grown considerably. A prime example is the Hair Club for Men, which offers non-surgical hair replacement.
In a beauty salon run as a sole proprietorship, the principal is most likely female and is often an active hairdresser in the establishment. Such salons are typically geared exclusively toward women and offer a range of additional services, including manicures, facials, and massages. These auxiliary services provide an important part of the income generated by the smaller salons. Both owners and employees of these beauty shops are usually licensed cosmetologists who have attended state-certified cosmetology schools and passed standardized exams before receiving their licenses. Stylists are typically compensated on a commission-only basis or through a salary-plus-incentive plan.
Hair salon chains generally market their services toward families; consequently, they report a larger number of men and children among their clientele. These salons staff a larger number of stylists and primarily offer only the basic services of cutting, perming, and coloring. Stylists in these establishments generally receive a straight salary without any further compensation.
Franchised salons, which are commonly found in such high-traffic areas as strip malls, may be started up by a single entrepreneur or by a group. The franchisee pays the franchise holder an up-front fee, typically between $10,000 and $25,000, and continues to pay a 10 percent royalty on sales. In turn, the franchise holder pays for advertising costs and avails other resources to the franchise unit.
The service industry of hairstyling dates back to ancient Egypt, Rome, and Greece. Not until the late nineteenth century, however, did establishments geared toward the public begin to flourish. Their popularity was aided by the development of technological innovations that created new demands for hairstyles. These novelties included the use of synthetic and organic haircoloring products in 1883 and the invention of a chemical method of permanent waving around 1927.
Schools of cosmetology were first established in the late 1890s to train students, primarily women, for the burgeoning profession. For many years, small sole proprietorships were standard in the industry. As the purchasing power of working women rose rapidly during the 1970s and 1980s, the industry began to expand and the number of corporate-owned salons increased dramatically.
Hairdressing services have proven to be virtually recession-proof, as consumers traditionally cut back on other discretionary expenses before decreasing their spending on personal grooming. The industry experienced a promising annual growth rate that ranged between 10 and 20 percent until the early 1990s, when it fell drastically to only three percent. Since then smaller, privately-owned salons and no-frills unisex establishments have focused on filling specific niches in the market rather than competing against one another. Some corporate-owned salons focus on providing fast service at inexpensive prices. These entities have concentrated on capturing market share through a large number of outlets spread among densely populated communities. The older and more established sole proprietorships often market their fuller range of personal care services not as luxuries, but rather as accompaniments to a more healthy and vivacious lifestyle. These salons offer their clients such services as tanning facilities, relaxation massages, and seaweed bodywraps. Industry analysts have theorized that an aging class of baby-boomers will freely spend extra income on such services that make them feel youthful, and they forecast success for salons offering these amenities in addition to traditional beauty services.
Regis Corporation is the world's largest owner and franchiser of hair salons, with more than 5,000 salons in the United States, Canada, Puerto Rico, and the United Kingdom. It operates the chains Regis Hairstylists, Supercuts, MasterCuts, Trade Secret, and Smart Style (located in Wal-Mart stores). Despite its position as world leader, the firm holds only a two-percent share of the highly fragmented U.S. salon market. Regis traces its roots to a single barbershop founded in 1922, which grew to an enterprise of 60 shops over the next three decades. During the 1960s, it began establishing salons in shopping malls, a strategy that fueled rapid growth. It also began acquiring competitors, including its purchase in 1999 of the 980-salon chain The Barbers, Hairstyling for Men & Women. Regis' revenues that year exceeded $927 million.
Opal Concepts, Inc., is the nation's second-largest salon company, with 1,660 salons in more than 40 states. Its largest chain is Fantastic Sams, which operates more than 1,300 salons in five countries. Opal's other salons operate under such names as Jose Eber Salons, Pro-Cuts, Carlton Hair International, Linear Hair, American Hair Force, and Haircuts Plus. Founded in 1990, the firm is owned by Japan-based Shiseido Company, several investment firms, and a management group.
The Hair Club for Men serves the market niche of men's hair replacement. Founded in 1976, the firm had 80 locations throughout the United States and Canada by 1999. Hair Club specializes in adding a customized, human hair blend to a client's existing hair, and then offers the client hairstyling services in the months and years following the procedure.
Women are generally the owners of and principal stylists in privately-owned and -operated salons. Smaller salons have an average staff of five employees, most of whom are fully-licensed cosmetologists. Often these stylists work full-time, but many salons also hire part-time employees. Larger firms often employ a receptionist, a greater number of stylists, and a shampoo crew. Employees in a salon's shampoo crew are usually students in cosmetology programs who work in salons on an apprenticeship basis.
According to the 1998-99 Occupational Outlook Handbook, approximately 586,000 hairdressers, hairstylists, and cosmetologists were employed in the United States in 1996, with another 43,000 jobs held by manicurists and 13,000 by shampooers. About 40 percent of cosmetologists were self-employed, working in a privately-owned and -operated salon. The remaining 60 percent leased workspace from the owners of such salons, with their income coming from either commissions or wages. The median weekly income for cosmetologists was $290 in 1996, far below the national median of $490 across all industries. Factors that contribute to income include size and location of the salon, the number of hours worked, and the ability to attract and maintain clientele.
All states require the licensing of cosmetologists, a process that typically entails graduation from an accredited cosmetology school and successful completion of written and practical examinations. Licensed cosmetologists are often required to attend additional classes to keep abreast of new styles and techniques.
The Occupational Outlook Handbook expects employment in the cosmetology industry to increase as fast as the national average for all professions through 2006. Manicurists are expected to experience the fastest growth, as are other such specialists as estheticians, who provide skin treatments, and electrologists, who remove unwanted hair through electrolysis.
"Barbers and Cosmetologists." Occupational Outlook Handbook. 1998-99. Washington, DC: Bureau of Labor Statistics, 1999. Available at http://stats.bls.gov/ocohome.htm .
Fantastic Sams Web Site. Available at http://www.fantasticsams.com .
Hair Club for Men Web Site. Available at http://www.hairclub.com .
Regis Corporation Web Site. Available at http://www.regiscorp.com .
U.S. Bureau of the Census Web Site Available at http://www.census.gov .
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