When the economy tanks, there are a few industries and businesses that do particularly well.
Your neighborhood liquor store is one example. The repossessions industry certainly sees a boost. Discount retail chains like Wal-Mart thrive.
Perhaps it’s no surprise then that the cheap hair salon down the road, the one with the pictures of smiling moms and children blown up in its window, rode a wave of robust sales during the Great Recession that has lingered all the way into 2013.
“In a bad economy, people that normally go to salons and pay $50 or $60 for a haircut or more, they came down to us and found that, ‘Heck, I can get pretty good service for just $15 or $20,’ ” said Bob Loffredo, regional developer of Fantastic Sams Hair Salons.
The salon chain was founded in 1974 in Tennessee and grew steadily across North America over the next few decades. But it wasn’t until the recession hit in full force that Fantastic Sams embarked on an aggressive expansion campaign to add locations.
It currently boasts more than 1,200 salons, although each store is technically an independently owned franchise. Hair care, a $59 billion industry that grows with the population, also appears to be a recession-proof industry, though no one can say exactly why. Perhaps it simply follows the motto: “Look good, feel good.”
But as women are seeking more color treatments and men are forgoing barber shops for salons, the Capital Region appears to be reaping the benefit of Fantastic Sams’ success more than other regions. With 13 salons, the Capital Region has consistently had some of the highest sales averages of any Fantastic Sams salons in the nation, said Bob Cornell, a local franchise owner.
“We’re kind of unique,” he said. “Three of our stores are in the top 50 salons with the highest sales averages, and another four of our stores are in the top 100. We’ve always been overachievers, and I think it’s because we have a great group of owners and some great managers in these stores that have been here a long time.”
But Cornell, who owns Fantastic Sams locations in Scotia, Amsterdam and Colonie, admits the region is also benefiting from what he calls the “GlobalFoundries effect.” Ever since the semiconductor manufacturing giant built a fabrication plant in Malta, the construction and housing industries have boomed in southern Saratoga County, and high-tech service and supply companies moved into the region.
And Fantastic Sams knows a market when it sees one. It invested five years ago in retail software that identifies areas of the country with the right demographics and market opportunities for the chain to move into.
“We’re looking right now at a few areas in the immediate Capital District to add salons,” said Cornell, who declined to divulge potential sites, but said southern Saratoga County would probably be the first region to get a new salon.
In the last two years, Fantastic Sams has added locations in Latham Farms Plaza in Latham and on Central Avenue in Albany.
Fantastic Sams’ goal is to get to 2,000 salons in the next three or four years, said Loffredo. Some markets, like Southern California, are saturated. Others, like New York, have potential.
“Based on the demographics of the state, holy cow, we could easily over the next five years develop all across the state,” he said. “In Orange County, Calif., we have 200 salons. I think in New York, we could surpass that over the next three to five years.”
In response to its rapid growth, Fantastic Sams has added employees, extended hours and is now open seven days a week.
To read all the stories from the 2013 Outlook special report, click here.