Hair Salon Owner: No Sign Of Revenue Growth Despite Industry Increases
Hairdressers, barbers and cosmetologists held roughly 821,900 jobs in the United States in 2008. In Jan. 2009, a National Cosmetology Association poll of 600 mid-to-high-end salons found that 72 percent had seen drops in clients’ spending.
“The salon business has been harmed by the recession because it is a luxury, ”said Avner Chamir, a hair salon owner in Sherman Oaks, Calif. “People will cut back on these expenses. This recession has been hard on us just like everyone else.”
Chamir’s business, Diva Hair Salon, first faced economic trouble at the end of 2008. The owner claims he can see no sign of recovery despite projected gains in personal consumption expenditures.
“I’ve been forced to make tough decisions,” he said. “I’ve had to let people go.”
Chamir’s salon, which has boasted a number of wealthy clientele, has seen a 40 percent revenue drop in business since late 2008.
“I haven’t seen more customers. I know we hear the recession is over, but for us it’s not. Nothing has changed but maybe 2011 will be better—we’ll wait and see,” said Chamir.
According to the Bureau of Labor Statistics, many barbers and hairdressers are self-employed, opting to lease a booth or chair space from a salon owner rather than risk a business venture.
Chamir now leases a chair to former stylists who, prior to the country’s economic woes, received a set salary plus bonuses. Chamir has needed to lay off other employees, from assistants to stylists. His salon no longer has a cosmetologist, simply because it was too expensive to keep one on permanently, and instead focuses exclusively on hair design.
“I work longer days, much harder than before,” he explained. “I fly out to San Jose twice a month for a few clients who can’t come to Los Angeles. You have to be creative to keep your doors from closing.”
Chamir’s colleagues, independent contractors, rent a chair and pay a monthly fee for utilities and the building’s maintenance. Cutting back on his stylists’ salaries by paying them an hourly wage and having them rent a chair in his salon has not been an easy decision. Chamir has had to cut back on expenditures, both in his business and privately, but so have his stylists.
“You can feel the recession. I can see it in my paycheck. I lost my condo. My best clients can’t afford to come see me,” said Reuven Moyal, a stylist who has worked with Chamir for more than a decade.
Chamir said that he has kept prices steady despite the recession.
“Women can’t afford luxury treatments right now. So if I raise prices I may alienate the few people who still try to come once or twice a month,” said Chamir.
Chamir’s advice for politicians, at all levels, is to cut taxes for small businesses.
“I liked being able to hire people and I can’t do that anymore. Instead, I have to pay extra taxes,” Chamir said.
“I now have to pay a tax for having my logo at the window. Not only do I pay high rent like many businesses on Ventura Boulevard, but I have to pay extra to the city for every logo at the window.”
Several of Chamir’s clients have told him they have to cut back and resort to purchasing hair color from drug stores. Rather than seeing the hairdresser once a week, they now only seek Chamir’s services for special occasions or on a monthly basis.
“Clients who have been with me for years can’t afford to come,” said Chamir. “They go to the drugstore or supermarket and buy hair color.”
Chamir believes that the sales of over-the-counter hair treatments, which have increased since the start of the recession, indicates economic troubles, at least for him, are far from over.
Reach Reut Cohen here.