Supercuts 2002 Annual Report Download - page 10

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Table of Contents
Strip Center Salons . The Company’s Strip Center Salons are comprised of 1,476 company-owned and 1,988 franchised salons operating in
strip centers under the following concepts:
7
Supercuts
. The Supercuts concept provides consistent high quality hair care services to its customers at convenient times and locations
and at a reasonable price. The stores are designed for ease of operation and the demand for basic hair care is believed to be recession
resistant and non-seasonal. This concept appeals to men, women and children, although male customers account for over 65 percent of
total haircuts. The average sale at Supercuts salons is approximately $12. At June 30, 2002, the Company operated 1,664 Supercuts stores
in North America, including 952 franchised locations. Revenues from company-owned Supercuts and franchising activity during fiscal
2002 was $165.5 million and $33.0 million, respectively, or 13.7 percent of the Company’s total revenues. The Company plans to
construct 80 new company
-
owned salons and franchisees will open an additional 100 Supercuts stores in fiscal 2003.
Cost Cutters. This group of franchised salons was added to the Company’s salon base as a result of the merger with The Barbers in fiscal
1999, as previously discussed. Cost Cutters salons provide value-priced hair care services for men, women and children and sell a
complete line of professional hair care products. The average sale at Cost Cutters salons is approximately $13. At June 30, 2002, the
Company franchised 612 Cost Cutters salons in strip centers and 210 Cost Cutters salons in Wal-Mart stores and supercenters generating
franchise revenues during fiscal 2002 of $23.7 million, or 1.6 percent of the Company’s total revenues. The Company plans to add 40
franchise salons in strip centers and an additional 40 franchised salons in Wal-
Mart stores and supercenters during fiscal 2003. In addition
to the franchised salons, the Company operates company
-
owned Cost Cutters salons, as discussed below.
Other Company-owned Strip Center Salon Concepts . Company-owned Strip Center Salons are made up of successful salon groups
acquired over the past five years operating under the primary brands of Hair Masters, Style America, First Choice Haircutters, Best Cuts,
Cost Cutters, BoRics and Magicuts, as well as other regional brand names. All concepts offer a full range of custom hairstyling, cutting,
coloring and permanent wave as well as hair care products. Hair Masters offers moderately-priced services to a predominately female
demographic, while the other brands primarily cater to time-pressed, value-orientated families. The average sale for a company-owned
strip center salon is approximately $13. At June 30, 2002, the Company operated 764 salons within this concept. Revenues from this
group of salons during fiscal 2002 were $155.9 million or 10.7 percent of the Company’s total revenues. The Company anticipates
building 60 new salons in this group in fiscal 2003.