Supercuts 2005 Annual Report Download - page 22

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In 2003, Hair Club began marketing to women and changed its name to Hair Club for Men and Women. This represents a large and
relatively untapped market. Women now represent approximately 45 percent of new customers.
Currently, all locations offer hair systems, hair therapy and hair care products. Among the hair restoration centers’ product offerings
are hair transplants. The hair restoration centers employ a hub and spoke strategy for hair transplants. As of June 30, 2005, nine locations
were equipped and staffed to perform the procedure. Currently, a total of 19 hair restoration centers offer this service to their customers, as
these persons will travel for this surgical procedure. The Company plans to add the capability to conduct hair transplants to more centers
in future periods.
The Company’s corporate and franchise hair restoration centers are located in markets representing 72 percent of all U.S. television
(TV) households. The Company’s hair restoration centers advertise on cable TV to over 93 million households, or 85 percent of the total
U.S. There is an opportunity to add a limited number of new centers in under-penetrated markets. Additionally, the Company is currently
investigating international expansion opportunities.
The Company plans to implement cross-marketing initiatives into select hair salons in an effort to cost-effectively drive additional
traffic to its hair restoration center’ call centers. The Company experienced over 17 million customer visits to its hair restoration centers
during fiscal year 2005. The Company believes that many of these customers or their friends, relatives and spouses may be interested in its
hair restoration centers’ products and services. These initiatives will not replace the hair restoration centers’
infomercial marketing tactics,
but rather serve as incremental lead generation.
Hair Restoration Acquisition Growth. The Company plans to supplement organic growth with opportunistic acquisition activity.
The hair restoration industry is comprised of a highly-fragmented group of 4,000 locations. This landscape provides an opportunity for
consolidation. Given the existing coverage of Hair Club locations, it is anticipated that transactions may involve the acquisition of
customer lists, rather than physical locations.
Corporate Trademarks:
The Company holds numerous trademarks, both in the United States and in many foreign countries. The most recognized trademarks are
“Regis Salons,” “Supercuts,” “MasterCuts,” “Trade Secret,” “SmartStyle,” “Cost Cutters,” “Hair Masters,” “Jean Louis David,” “Saint Algue,”
“First Choice Haircutters,” “Magicuts” and “Hair Club for Men and Women.”
“Vidal Sassoon” is a registered trademark of Procter & Gamble. The Company has a license agreement to use the Vidal Sassoon name for
existing salons and academies, and new salon development.
Although the Company believes the use of these trademarks is an element in establishing and maintaining its reputation as a national
operator of high-quality hairstyling salons, and is committed to protecting these trademarks by vigorously challenging any unauthorized use,
the Company’s success and continuing growth are the result of the quality of its salon location selections and real estate strategies.
Corporate Employees:
During fiscal year 2005, the Company had approximately 55,000 full- and part-time employees worldwide, of which an approximately
49,000 employees were located in the United States. None of the Company’s employees are subject to a collective bargaining agreement and
the Company believes that its employee relations are amicable.
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