Supercuts 2003 Annual Report Download - page 19

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Table of Contents
Staff Recruiting and Retention
Recruiting quality managers and stylists is essential to the establishment and operation of successful salons. In search of salon managers, the
Company’s supervisory team recruits or develops and promotes from within those stylists that display initiative and commitment. The
Company has been and believes it will continue to be successful in recruiting capable managers and stylists for a number of reasons. The
Company utilizes a broad compensation system including cash incentives, merchandise awards, company-sponsored trips and benefit
programs. The Company believes that its compensation structure for salon managers and stylists is competitive within the industry. Stylists
benefit from the Company’s high-traffic locations and receive a steady source of new business from walk-in customers. In addition, the
Company offers a career path with the opportunity to move into managerial and training positions within the Company.
Salon Design
The Company’s salons are designed, built and operated in accordance with uniform standards and practices developed by the Company based
on its experience. New salons are designed and constructed according to the Company’s standard specifications, thereby reducing design and
construction costs and enhancing operating efficiencies. Salon fixtures and equipment are also uniform, allowing the Company to place large
orders for these items with attendant cost savings.
The size of the Company’s salons ranges from 500 to 5,000 square feet, with the typical salon having about 1,200 square feet. At present, the
cost to the Company of constructing and furnishing a new salon, including inventories, ranges from approximately $40,000 for a new
SmartStyle to $185,000 for a Regis Salon. Of the total construction costs, approximately 70 percent of the cost is for leasehold improvements
and the balance is for salon fixtures, equipment and inventories.
The Company maintains its own design and construction department, which designs and supervises the constructing, furnishing and fixturing
of all new company-
owned salons and certain franchise locations. The Company has developed considerable expertise in designing salons. The
design and construction staff focuses on visual appeal, efficient use of space, cost and rapid completion times.
Operations
For each salon concept, the Company’s operations are divided into geographic regions throughout North America. Each region is managed by
one of the Company’s salon directors, assisted by regional field managers and area supervisors, who coordinate the operations of the salons in
the particular region. The area supervisors are responsible for hiring and training the managers for each salon. The salon directors for each
salon concept report to the division’s Chief Operating Officer. Division Chief Operating Officers report to the Company’s Chief Executive
Officer, who functions as the overall chief decision maker.
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