Supercuts 2008 Annual Report Download - page 14

SmartStyle.
The SmartStyle salons share many operating characteristics of the Company's other salon concepts; however, they are
located exclusively in Wal-Mart Supercenters. SmartStyle has a walk-in customer base, pricing is promotional and services are focused on the
family. These salons offer a full range of custom styling, cutting, hair coloring and waving services as well as professional hair care products.
The customer mix at SmartStyle Salons is approximately 76 percent women. Professional retail product sales contribute considerably to overall
revenues at approximately 34 percent. Additionally, the Company has 146 franchise Cost Cutters salons located in Wal-Mart Supercenters. The
average ticket is approximately $19.
The average initial capital investment required for a new SmartStyle salon is approximately $34,000, excluding average opening inventory
costs of approximately $13,700. Average annual salon revenues in a SmartStyle salon which has been open five years or more are approximately
$275,000. During fiscal year 2009, the Company plans to open approximately 50 to 125 new company-owned SmartStyle salons and
approximately 4 franchise salons in Wal-Mart Supercenters.
Strip Center Salons. The Company's Strip Center Salons are comprised of company-owned and franchise salons operating in strip
centers across North America under the following concepts:
Supercuts. The Supercuts concept provides consistent, high quality hair care services and professional products to its customers
at convenient times and locations and at a reasonable price. This concept appeals to men, women and children, although male customers
account for approximately 66 percent of the customer mix. Service revenues represent approximately 89 percent of total company-
owned
strip center revenues. The average ticket is approximately $15.
The average initial capital investment required for a new Supercuts salon is approximately $103,000, excluding average opening
inventory costs of approximately $9,000. Average annual salon revenues in a company-owned Supercuts salon which has been open five
years or more are approximately $266,000. During fiscal year 2009, the Company plans to open approximately 24 new company-owned
Supercuts salons, and anticipates that franchisees will open approximately 63 new franchise Supercuts salons.
Cost Cutters (franchise salons).
The Cost Cutters concept is a full service salon concept providing value priced hair care services
for men, women and children. These full service salons also sell a complete line of professional hair care products. The customer mix at
Cost Cutters is split relatively evenly between men and women. Franchise revenues from Cost Cutters salons are split relatively evenly
between franchise revenues related to royalties and fees and those from product sales to franchisees. Average annual salon revenues in a
franchised Cost Cutters salon which has been open five years or more are approximately $288,000. During fiscal year 2009, the
Company anticipates that Cost Cutters franchisees will open approximately 28 new salons.
In addition to the franchise salons, the Company operates company-owned Cost Cutters salons, as discussed below under
Promenade Salons.
Promenade Salons. Promenade Salons are made up of successful regional company-owned salon groups acquired over the past
several years operating under the primary concepts of Hair Masters, Style America, First Choice Haircutters, Famous Hair, Cost Cutters,
BoRics, Magicuts, Holiday Hair and TGF, as well as other concept names. Most concepts offer a full range of custom hairstyling, cutting,
coloring and waving, as well as hair care products. Hair Masters offers moderately-priced services to a predominately female
demographic, while the other concepts primarily cater to time-pressed, value-oriented families. The customer mix is split relatively
evenly between men and women at most concepts. Service revenues represent approximately 89 percent of total company-owned strip
center revenues. The average ticket is approximately $18.
The average initial capital investment required for a new Promenade Salon is approximately $96,000, excluding average opening
inventory costs of approximately $8,000. Average annual salon
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