Hair salons positioned for a major boost in business after reopening

Sola Salon CEO Christina Russell joins Yahoo Finance’s On The Move panel to discuss reopening more than 200 Sola Salon locations and help break down the future of the salon industry.

Video Transcript

JULIE HYMAN: You're watching "On The Move" on Yahoo Finance. As we start to see different states make their way through the different phases of reopening, a lot of folks are anxious to get haircuts. I speak from experience.

We're joined now by Christina Russell. She is CEO of Sola Salon, which is a franchise company that has about 500 salons in its network. Christine is joining us from Denver. Thank you for joining us. So how many of those 500 salons are now open? And what kind of precautions are folks needing to take?

CHRISTINA RUSSELL: Yeah, thank you so much for having me. I have to say, we are excited today to be about 80% open. So we are fully open across most of the states. There's only seven where we're still fully or partially closed. And that means we have about 425 of our locations open. And this is something that means a lot to our beauty professionals.

We actually provide support to over 15,000 individual independent beauty professionals that operate within our locations. So it's good to see them all back in business. They were eager to get started.

As far as precautions, you know, it's been an interesting journey with this, realizing that we have in our models some-- some natural things that actually make it a little bit different than probably what the traditional salons are going through because we do operate in individual studios. I see that you guys are actually showing some images there on the screen. I don't know if those are showing up for the viewers. But you can see that each studio is independent and it has its own sliding door. So it's always a one-on-one interaction at Sola. And it's allowed our stylists to give their clients a little bit more comfort with coming back in for these types of services.

But there have been quite a few changes that we've made both operationally and in terms of our cleaning protocols to make sure that we're keeping clients and our beauty pros safe.

DAN HOWLEY: Christina, I just kind of want to ask, what are you seeing from clients or what are the franchises seeing from clients? Are they hesitant to return? Have they returned en masse? Are they trickling in? How has the reception been?

CHRISTINA RUSSELL: We wondered about that and how that might differ across different markets where the COVID-19 outbreak has obviously been a little bit different in certain markets. But what we've generally seen is just an eagerness to get back to work. Because our stylists are independent beauty professionals, they're not employees, this is really their sole livelihood. And they don't have the ease of getting the PPP because they're such small micro-businesses. So you know, the benefits may or may not be there. But it's hard for them to really make it through because the loans they would need are such microloans.

And then in terms of unemployment, they're not traditional employees. And while some of the laws were changed in states to allow independent professionals to also apply for unemployment, not all of them made it through the eligibility process and actually ended up seeing money in their pockets. So they've been eager just to get back in.

From a client perspective, we have seen that, you know, the pent-up demand that you hear people talk about certainly was true in the hair industry. Many of them had been busier than ever. We saw a huge uptick in terms of their business through the platforms that we can view. And we were impressed with that. We were not surprised by it. And we imagine that it will continue at least for the first few months of this as they catch up with clients who've waited, you know, several months to come in for services. And then we anticipate that it will normalize a bit as people get back into their normal hair care routines.

As far as is the uptick in our business with stylists, you know, it's interesting, because the beauty industry at large is feeling a lot of strain around this. And it's really tragic for some of the smaller mom and pop businesses, independent salons because they may or may not be able to weather the storm. We've heard estimates from beauty industry experts and analysts saying that it could be between 10% and 30% of traditional salons that don't make it through the crisis. And that's, you know, astonishing.

And it's, as I say, it's a tragedy for our industry. What that means for us is that there's quite a few stylists that are looking for a home. And so we've seen a lot of interest in going independent, in renting studios and our spaces.

ADAM SHAPIRO: Christina, it's Adam here. And a lot of us are rooting for these businesses to succeed. There's a lot of fear about the airborne possibilities of COVID. And yet a lot of cities regulate the air filtration systems at hair salons. Forgive me for quoting "Legally Blonde," because you have things ammonium thioglycolate in the air, do those filtration systems-- it would seem to me that they are an extra safety feature. I mean, the regulations might be, you know, pretty strict in New York City. But here you have something that-- unintended consequences to the positive.

CHRISTINA RUSSELL: I agree with that 100%. And I think, you know, the other benefit that a lot of people don't realize in the beauty sector, unlike the folks that are preparing or delivering your food who don't get a whole lot of training in sanitation, beauty professionals take hundreds and some estimate over 1,000 hours of sanitation and cleanliness training as part of their certification. So between that certification that they've done already and the learnings that they had even through the AIDS epidemic, we've partnered with Barbacide, who helped the industry through the AIDS epidemic in terms of understanding disinfection. Those kinds of tools and resources for recertification are very familiar to our professionals.

And then in terms of the filtration, you're absolutely right. This is a big concern for the beauty professionals that operate within our locations because each one has her small studio. A location might have 20 to 40 studios in it. And they don't want to have the mixing of the odors and chemicals from one studio or another. So we pay a lot of attention to that ventilation already. And that has given, I believe, some comfort to our clients and even to beauty professionals that operate out of traditional salons as well to look at the differences that might be happening in the studio environment.

JULIE HYMAN: Christina, thanks for talking us through what you and your various salon professionals are going through. Christina Russell is the CEO of Sola Salon. Thanks so much. Appreciate it.