What Do You Consider Before Integrating Two Salons Into One?
Business consultant Ryan Fox shares a a successful salon merger case study and reveals what you need to consider before integrating two salons into one
Last year Luca Sparti Cesari of Concrete Hair in Covent Garden was told by his landlord the block where his salon was based was being redeveloped. Luca had three choices – he could either find a new location, close the business, which put all of his team out of work or sell the business.
He ruled out finding a new location due to rising rents and increasing competition in the Covent Garden area. Luca had recently become a father so he decided to sell the business so he could move back to his native country of Italy.
Selling a salon with no salon
Luca approached a lawyer to ask how to sell the business and discovered it would be very difficult to sell a salon with no physical salon as the building lease would not form part of the sale.
He was keen to ensure the team would have the option to carry on working in the area so they wouldn’t lose their clients or jobs. He suggested the idea of a salon merger with a nearby salon in Covent Garden.
The nearby salon – Giannasso Hair & Beauty had been operating in Covent Garden for over 10 years. This award-winning luxury salon was well run, successful and ready to expand. The salon owner Sergio Giannasso explains: “It is becoming increasingly difficult to find good quality stylists and this was holding back the growth of my business.”
Both salon owners agreed the integration of the Concrete team into the nearby Giannasso Hair & Beauty salon could be a win-win for everyone. A larger team with existing clients in the area and one set of overheads could be the answer and would give everyone the chance to save their job.
The salon merger agreement
The next step was to come up with an agreement that was fair for both owners and would take care of the team. The existing Concrete employees were transferred under the TUPE rules (Transfer of Undertakings (Protection of Employment) Regulations) to give them continuation of service under their existing contracts. As part of the agreement it’s also vital that you are clear about the price of the business and how and when payments will be made.
Creating one brand culture
Once the agreement was signed, arrangements had to be made to integrate the team into the new salon and to manage the transfer as smoothly as possible. In consultation with Sergio, it was my job to understand his vision and philosophy and help him clarify a new structure for the business, using everyone’s strengths as much as possible. Once this was clear, it was important to communicate this to the team. An outstanding client service and teambuilding training session was designed to get everyone on the same page with regards to standards and to bring the team together as one new team under the single Giannasso brand.
Managing the change
Sergio believes the key to bringing about successful change is to think about everyone individually as well as the team as a whole. You should be inclusive and open to everyone’s input but think about it in terms of integration not collaboration.
Creating the new structure, policies and procedures and the training session are just the beginning of the story. We are half way through a 12-month business development and coaching programme which is helping to fully integrate the new team and drive the performance of the new larger business. Sergio said: “Since the changes we have seen good results with salon turnover up 62% on the previous six months and profits up 18%, which shows it was the right decision all round.”
Could a salon merger work for you?
With increased costs for salons such as rents, rates, minimum wages and pensions coupled with the challenges of recruiting staff and increased competition, it could be worth considering a merger or salon integration of you own. Why pay two lots of rents and rates for two salons that are half full when you could have one set of costs, a full salon and a healthy profit?
The trick to making the merger a success is not to embark on it without discussing it with an expert first. “I would recommend hiring someone who is external and can help you with both sides of the integration from a completely fair and impartial standpoint. It’s also crucial to work with someone who has experience dealing with complex salon situations,” explains Sergio.
Ryan Fox is a salon consultant who can help with a salon merger or integration. For a confidential consultation contact him on 07702 208 311 or visit his website.