Before Hair Cuttery's bankruptcy in April 2020, the salon chain had over 800 salons under various brands, including Hair Cuttery, Bubbles, Salon Cielo and Spa, Color Works, and Salon Plaza. Soon after the company filed for Chapter 11, Tacit Capital LLC, a private equity firm, bought its assets.
Before the acquisition, Tacit Capital engaged FTI Consulting to assess Hair Cuttery's operations — including store labor and footprint, supply chain, merchandise and, back-office functions. Post-acquisition, FTI Consulting then worked with Tacit to stand up the new organization and execute a subset of identified efficiencies from the assessment.
FTI Consulting worked to redefine how the salon chain should operate in a post-COVID environment. To set this strategy, the team answered three fundamental questions:
- Which business units are profitable?
- Which products are profitable?
- Which customers are profitable?
The answers to these questions resulted in (1) a framework to support reductions in the salon footprint, (2) streamlined products sold at retail, and (3) unique customer segments for acquisition targeting. FTI Consulting engaged salon operations, product and supply chain, IT, finance, and HR to redefine the chain's future state.
Hair Cuttery re-opened 500-plus salons within four weeks post-acquisition. By right-sizing and simplifying the business model, about $25 million in cost-savings opportunities were identified and implemented.
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