As the coronavirus pandemic spreads, government-mandated shutdowns have hit the professional side of the beauty industry hard. As spa and salon owners have had to close their doors, hairstylists, makeup artists, nail technicians, massage therapists, and estheticians find themselves out of work. Freelance session artists that work on a project basis for editorial shoots or advertising campaigns are also in a precarious situation.
Before the pandemic struck, the US hair and nail salon market was forecast to be $64 billion in 2020 and employs 1.7 million people, according to IbisWorld. As of March 27, BehindtheChair.com said that less than 50 percent of hair salons were still open, and of those that remain open, stylists have had their hours severely cut and must adhere to rigorous new sanitary practices.
“It’s pretty much a full shutdown in most states,” Edwin Neill, Chief Executive Officer of Neill Corporation, an independent distributor of Aveda in seven southern states, including Texas, Louisiana, and Tennessee, told WWD. “Our professionals are sitting at home, waiting for this to be over.”
Black Market Services: Covid-19 has turned common jobs into high-risk professions. The Washington Post reported how stylists are bypassing the order for nonessential businesses to close by placing ads on Craiglist, performing services despite warnings that social distancing is the best protection against spreading the infection. Some are doing it out of necessity, while others are simply trying to be of service. For those whose business is based on making house calls, business if booming.
“With nails, of course, it’s not the end of the world if you don’t have it,” said Stephanie Mooij, a nail technician in Raleigh who started doing house calls after the salon she worked at closed temporarily. “But if they don’t look good and they’re not kept up, it’s kind of like mental health status, you know? You look down and it’s like, ‘Everything’s falling apart, and my nails are falling apart.’”
Professional Distribution: With the majority of salons and spas closed, brands distributed in the professional channel are having to shift their focus online to drive product sales through the shutdown.
“When a chain of distribution is shut, you can pretty much assume [that] business is not there anymore,” Aurelian Lis, CEO of Dermalogica, which sells skincare to 22,000 salons globally, told WWD. The brand’s professional skincare products comprise about 50 percent of the business, said Lis, which was up double digits before Covid-19 began to spread.
Tev Finger, CEO of LBP and co-founder of R+Co, was initially nervous about R+Co, the biggest brand in his portfolio, which distributes primarily through salons, but has been pleasantly surprised by how online business has picked up while brick-and-mortar locations are closed, he told WWD. “[The salon channel] is getting pummeled,” said Finger. “But we’re finding a big uptick on direct-to-consumer and Amazon.”
Professional Affiliate Programs: Retail sales make up a portion of any stylist’s pay, so professionally distributed brands like Amika, Olaplex, and R+Co have set stylists and salons with the ability to receive up to 40% commission from orders their clients place.
“Now more than ever it is critical to keep revenue coming into small businesses,” Finger told Modern Salon. “We wanted to leverage our warehouses and technology to provide salons the ability to do home-delivery of products. Our teams will handle all the packing, shipping and fees—all a salon has to do is send their customers a custom link. It won’t replace the service revenue in this downturn, but it will still allow salons and stylists to keep their retail businesses going, especially when their customers are looking to stock up on their favorite products and support their favorite salon.”
Digital Efforts: Many businesses in the professional channel are upping their digital game in order to drive sales, but also in an attempt to reinforce connection with their customers and the community.
Sales of Madison Reed’s at-home hair coloring kits have soared 750% in recent days, according to CBS News, while demand for Color Wow’s root cover-up product is also through the roof. Salons have also gotten into the at-home color game by pulling their clients’ custom formulas, creating kits, shipping them off with step-by-step instructions, and offering FaceTime tutorials. According to Business of Fashion, salon owner and hairstylist Paul Labrecque shipped over 150 custom hair color touch-up kits in the last week.
Content Creation: Those on the professional side of the beauty industry are a creative bunch. Some have used the downtime to up their content game either to bank assets for the future, to connect virtually, or simply as a coping mechanism.
The editorial nail artist Mei Kawajiri told Vogue, “So many people are looking for content, and I was looking for an outlet. It’s helping me cope, and a lot of people message me saying this is exactly what they need, content-wise. People are just looking to Instagram to find something interesting and creative and unique.” Watching the artist herself create well-protected faces may make you smile too.
Relief for Small Businesses: L’Oréal USA will freeze the payments of very small and small-sized enterprises in its distribution network, including hair salons, until their businesses resume. Additionally, L’Oréal USA will shorten its payment times for small suppliers who have been most exposed to this economic crisis.
SalonCentric is freezing invoices until the community is back to business as usual. Once everything is back to normal, customers will be able to set up a monthly repayment plan to handle old invoices and reorder new products.
Henkel will also consider improved payment terms for small and mid-sized hairdressers to support them during the current challenging situation.
The NY Nail Salon Workers Association has launched the Covid-19 Relief and Resilience Platform to solicit donations for nail techs. The organization is also advocating for the government to step in and provide more protection. “This crisis has exposed systemic injustices in our economy and society, and nail salon workers will continue to organize and fight for health, dignity, and justice at work and beyond,” said the association’s political coordinator Clara Wheatley-Schaller.
Education: Many brands and professional influencers are providing digital classes to create community and help stylists continue their education. Dermalogica has created a resource guide to help skincare professionals get through the crisis and online education open to all aestheticians. The resources include scripts for virtual consultations to a draft of a letter, approved by a lawyer, requesting an extension from landlords on paying rent.
The Bailout and Layoffs: Some professional beauty services businesses like Rita Hazan, who have 50-60 people on staff, are continuing to compensate their staff for as long as they can, while others like Heyday and Drybar have had to let their staff go. Consumers and industry watchdogs like Estée Laundry have called out some of these businesses for not paying employees through the shutdowns, but many of these smaller businesses simply aren’t liquid enough to do so.
“I’m waiting to hear from my accountant to see how we’re going to approach it, but I would like to compensate and take care of people as best I can—a lot of them have been very loyal to me for many years,” Rita Hazan told WWD. “I just need to figure it out financially. We’re waiting for these bailouts, and we’re going to take advantage of whatever we can.”
“In the case of the current extreme crisis, having to close physical touchpoints means there is a complete cut-off of revenue. Our industry, the beauty and service business, will be one of the later to recover as well,” Heyday co-founder Michael Pollak told Business of Fashion. “It’s just not feasible for a business to hold payroll indefinitely, and the unemployment insurance benefits are a more stable option for our teams.”
Despite government aid, Neill is already planning ahead for the salons in his network to be experiencing financial woes and told WWD. “We’re instructing them not to pay us in April, because they can’t do that and afford to open up again,” he said. “A lot of salons won’t be paying rent in April, or they’ll have to lay off or furlough [employees].”
Many spas and salons that have had to laynoff staff are setting up Go Fund Me pages, selling e-gift cards for future use, and selling product through their websites as a way to raise funds for employees.
Predictions: “It’s going to be a bit of a cascading effect — big corporate salons will survive, but it will be independents that feel the pressure,” Stephanie Wissink, managing director at Jefferies, told WWD. “We’re talking about a quarter of the year going away.”
Photo: AW Creative via Unsplash