Shear Technology

The salon business is not always about cutting hair. Sometimes, it’s about getting the right products to the right place and cutting inventory.

This was the issue for Ratner Cos., a Vienna, Va.-based operator of nearly 900 salons. The solution was an inventory management and replenishment system from Tomax that reduced inventory 20 percent without creating out-of-stocks. Retail.net also increased employee productivity, manages all facets of salon management for Ratner, including handling client data, booking appointments and completing sales transactions.

“It’s very difficult to increase new technology in the salon environment, so we relied on the centralized approach by Retail.net to deliver comprehensive applications,” says CEO Dennis Ratner, noting that capitalizing on real-time information would provide a higher level of service and value for customers.

With Retail.net, applications and data are centralized in the salons, which are connected via a wide area network (WAN). This facilitates real-time transaction management and information collection, and the result is an integrated online solution that supports everything from merchandising through store execution.

“For the past year, replenishment has not been an issue,” says Tim Lemieux, Ratner’s senior vice president and CIO. “People in the salons are getting the products they need and they’re really sold on the system.”

Ratner has several banners to meet the needs of a varied clientele. Along the way it has also built up a brisk business in hair products, including its own 40-item Cibu private label line. The primary brand is the Hair Cuttery, an 800-store value-priced chain that offers a full complement of salon services on a walk-in basis (no appointment necessary). Fifty salons under the Bubbles and Salon Cielo names are more upscale, with the latter offering full spa services. Another 15 Salon Plaza stores rent booths to stylists “who want to be in their own business … bring in their own customers and charge what they want,” Lemieux says.

One other brand, Colorworks, is in the process of being closed. “It overlapped with other upscale brands,” Lemieux says, and “we decided to focus on doing fewer things better.” Ratner also divested some underperforming salons in Georgia, North Carolina and South Carolina in 2008 because “we felt our investment would be better spent in other locations. Considering the economy, it was a good move and provided some significant cash for refocusing our growth,” which is scheduled to consist of approximately 30 new salons in 2009.

While “behind the chair” services represent the bulk of Ratner’s revenues, about 12 percent comes from selling hair care products. But inventory problems were the rule rather than the exception, according to Lemieux. Part of the problem stemmed from a manual inventory system.

“Stores would order products when they thought they needed them,” he says. “In essence, we had 1,000 merchants out there consisting of a salon leader and stylists who were trying to figure out how much of each product they needed. There’s a lot of emotion when people think they know what’s going to sell. Managers were ordering product and hoarding it and others couldn’t get what they wanted because the central warehouse in Pennsylvania was getting sucked dry.

“In some cases, salons ended up losing sales while others were overstocked,” Lemieux says.