Supercuts 2009 Annual Report Download - page 15

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Table of Contents
The average initial capital investment required for a new MasterCuts salon is approximately $150,000 to $200,000, excluding average
opening inventory costs of approximately $13,600. Average annual salon revenues in a MasterCuts salon which has been open five years or
more are approximately $290,000.
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 33 percent. Additionally, the Company has 122 franchise 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 $35,000 to $45,000, excluding average opening
inventory costs of approximately $14,000. Average annual salon revenues in a SmartStyle salon which has been open five years or more are
approximately $271,000.
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 $16.
The average initial capital investment required for a new Supercuts salon is approximately $110,000 to $120,000, excluding average
opening inventory costs of approximately $8,300. Average annual salon revenues in a company-owned Supercuts salon which has been open
five years or more are approximately $269,000.
The Supercuts franchise salons provide consistent, high quality hair care services and professional products to customers at convenient
times and locations and at a reasonable price. These Supercuts franchise salons appeal to men, women and children. Service revenues represent
approximately 93 percent of the Supercuts franchise total revenues. Average annual revenues in a Supercuts franchise salon which has been open
five years or more are approximately $339,000.
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. Average annual salon revenues in a franchised Cost Cutters salon which has been
open five years or more are approximately $282,000.
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, Cool Cuts for Kids, 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
13