For Shopping Center Landlords, a Hair Salon Trend Provides a Boost

by Scott Reid

By Carrie Smith and Katy Figg

A growing trend in the hair salon industry is proving to be a boon for shopping center landlords. A novel approach to owning and operating a styling service is not only increasing foot traffic to centers, but helping to fill harder-to-rent spaces.

The salon industry has evolved from the days of curlers and hooded hair dryers. Flashy interiors, flat-screen TVs and herbal teas have changed the ambience of salons. The latest innovation is related not to customer service but to operations, and is benefitting both shopping center landlords and owners.

A growing number of salons are moving to the suites concept. It transforms the salon professional from an employee or contract worker into a business owner who can operate a business without the expense of leasing an entire unit.

The stylist enters into a license agreement with the salon suite owner that has leased an entire unit from a shopping center landlord. The owner provides the stylist with as little as 125 square feet, utilities such as water and electricity, laundry and other cleaning services, and a receptionist.

The stylist operates as a business with its loyal clients, not as part of a local firm or national chain. The spaces, which are essentially mini-suites, can be used by hair stylists, skin care experts, nail technicians, massage therapists, aestheticians and others. They customize their spaces with wall treatments, music and other personal touches.

The movement began a little over a decade ago in large markets and has spread across the country. This year, nearly half of all U.S. salons will offer some form of license agreement, according to a study by Professional Consultants & Resources, an industry data source and consulting firm. The firm says that while high-end, proprietor-owned salons will not go away, they will become a minority as the salon-suite business model gains popularity.

Consumers have embraced the concept. They tend to be loyal to their stylist first, the salon owner second. They are more concerned with the quality of service and relationship with their stylist than with the sign over the entrance.

Shopping center landlords should cheer the trend. First, the independent stylists often have clients with higher demographics than customers of national hair cutter chains that tout convenience and affordability. In our experience, salon suites have attracted tenants such as luxury clothiers, jewelry stores and sophisticated restaurants whose products and services are aligned with the tastes of individuals who have disposable income.

In fact, a salon suite helped turn around a shopping center in Charlotte, North Carolina. The property had very few tenants until the salon opened. Its foot traffic attracted other tenants and helped it thrive.Katy Figg webKaty Figg

Many of the companies pushing the salon suite concept have established track records and national ambitions. Phenix Salon Suites, for example, has more than 100 locations. My Salon Suites operates in 20 states and is growing. Smaller chains such as iStudio and Salonz Beauty Suites in Florida have regional aspirations. While their roots are in hair styling, they are primarily business people and act more as landlords than salon owners.

Third, salon suites lease larger spaces. Whereas the typical salon occupies about 1,200 square feet, we find that the suites fill between 4,000 and 10,000 square feet to accommodate as many 30 stylists.

Almost as important, salon suites will lease almost any type of space, inline or free-standing, and aren’t as particular about location as other tenants. In fact, salon owners will take hard-to-rent units, such as those with L-shaped interiors, because their licensees operate in private spaces. Thus, a salon suite can be placed on a second floor or other space that another retailer would not accept because of lack of visibility.

Fifth, these larger salon suites don’t place stress on parking. We discovered that at any given time of day, no more than half of stylists are seeing clients. As a result, they don’t create the types of traffic congestion and parking problems that supermarkets and popular restaurants do at certain times of day.

Given the number of benefits of having a salon suite in a center, landlords, property owners and leasing agents should look for opportunities to add it to their mix. If their experience is like ours, they will be pleased with the results.

— Carrie Smith is regional managing partner in Franklin Street’s Jacksonville office, specializing in retail tenant and landlord representation throughout North Florida. She can be reached at (904) 271-4120 or via email at [email protected]. Katy Figg is an associate in the Jacksonville office, specializing in retail landlord and tenant representation. She can be reached at (904) 271-4120 or via email at [email protected].


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