We’ve written a cute intro to this blog posting two or three times, but it keeps getting erased (what the hell is going on?) and we have important grooming business to tend to. So, without further adieu, below is a recent article from the Washington Post that tells more than you ever wanted to know — and more than we ever wanted known — about our company. It’s actually great insight and pretty accurate. Guess we’ve got nothing to hide… just a couple guys working hard, trying to build a brand the old-fashioned way. We’ll see how it plays out. In any case, a real honor to be featured in our hometown daily. Thanks for your interest (if you’re interested). A link to the Post’s site is here.
A Well-Groomed Business
By Thomas Heath
Sunday, June 7, 2009
I was ahead of my time.
Almost 20 years ago, I started getting facials at Elodie Salon, then located in Mazza Gallerie in Chevy Chase. I sat in the reception area in as manly a slouch as I could muster, paging through Vogue as women came and went.
When my esthetician, a lovely woman named Mimi, came to the reception area to retrieve me, I tried to jump up before she could say my name. I would run the gauntlet through the reception area without looking anyone in the eye. I felt like the other (all female) patrons wondered what I was doing there.
I eventually got over being embarrassed about getting facials, although I have cut back because of the cost. I could buy a few shares of blue-chip stock for what a facial costs.
But entrepreneurs Michael Gilman and Pirooz Sarshar have built a profitable little business called the Grooming Lounge around insecure guys like me.
Starting with a Web site, and later with a store on L Street Northwest, just up the block from my office, and another in Tysons Corner, the Grooming Lounge caters to guys who want to tackle unmentionable stuff like nose hair or eye bags without entering a woman’s salon or approaching a brightly lit counter at Bloomingdale’s.
It isn’t the business that the two men expected to pursue.
Gilman, 38, and business partner Sarshar, 37, grew up in the salon business and met at industry shows. Gilman’s grandfather started Davidson Beauty Supply in the District 80 years ago, and Sarshar began cutting hair under his hairstylist mother when he was 14.
They both liked nice clothes and good grooming, and their friends were always peppering them with questions about moisturizers, eye creams and hair gels.
In 2000, they paid a Philadelphia couple $3,500 to start a Web site called http://groominglounge.com, which would be a retail site for products. Gilman and Sarshar wrote the copy. They bartered grooming products for the Web site photographs.
The site was run out of Gilman’s basement near the U.S. Naval Medical Center in Bethesda, and it did a tidy little business, producing revenue of about $50,000 a year on about a half-dozen orders a day.
Then they latched onto a much more promising niche: “the embarrassed male.”
“Our friends were always coming to us and asking, ‘Can you get me this moisturizer?’ ” said Gilman, who had worked in public relations in New York after graduating from Ohio State. “They didn’t want to go into a salon with a pretty woman behind the counter. There was absolutely no opportunity to get products and services they wanted in a masculine environment.”
When a Playboy magazine report on their Web site caused a spike in business, their confidence in the niche got a boost.
Most landlords and bankers rolled their eyes at the proposal by two young men to start a grooming store, but they hired an attorney and kept looking for retail space. They raised $310,000 from family members and signed a seven-year lease to rent 1,500 square feet on L Street Northwest, just west of Connecticut Avenue, for around $6,500 a month in 2002.
“It was a spa for guys who wanted a shave, haircut and manicure in an atmosphere where guys would not only feel comfortable, but would enjoy it,” Gilman said.
A 30-page business plan, which took three months to write, included minute detail of what the store would look like, who would answer the telephone and what products it would sell.
No pastels at the Grooming Lounge. The interior is wood and chrome, creating a clubby masculine feel. Magazines run from Guns & Ammo to Maxim to the Economist. No Vogues allowed in this place. No Lifetime Network either. The televisions are tuned to CNN and ESPN. Martinis and espressos are complimentary. Shaves are $50. Facials start at $80 and run to $140. Haircuts — which are their bread and butter — start at $50. There’s almost always someone getting a pedicure. You can buy nose tweezers and razors, too.
With zero debt on the L Street location, the Grooming Lounge was cash positive from the first day. The L Street store draws 60 to 70 men a day and grosses about $2.5 million a year in revenue, with a profit a bit under $200,000. The Tysons Corner store, which opened in 2006, does about $2 million in revenue, with a profit margin under 10 percent. The Web site now grosses around $1.75 million, and earns a profit of about $175,000.
A big source of revenue, 35 percent, comes from gels, shaving creams, moisturizers and other “solutions” that customers buy and take with them. The Grooming Lounge paid a New York laboratory more than $100,000 to create its own line of shaving and hair care products, and then sell it under the Grooming Lounge label. The margins on Grooming Lounge solutions are around 50 percent, helping boost the bottom line.
Gilman and Sarshar each take an annual salary just shy of $100,000, and in a good year add a 20 percent bonus. Profits are reinvested into the business for expansion and maintenance. The partners have borrowed about $500,000 for the Grooming Lounge product line and to expand to Tysons Corner. The payment on the debt is about $8,000 a month.
About 50 percent of their cost is labor, with a top groomer earning around $100,000 a year. Another 20 percent is rent, maintenance and utilities. Debt, insurance and cost of the goods they sell push the total cost side to around 90 percent, leaving a 10 percent margin.
Gilman said the profit margin will grow if they can expand sales of their product line, including on their Web site, in Grooming Lounge stores and in third-party locations. The company mails 200,000 catalogues a year to names from their customer base. It also helps every now and then to get free publicity from men’s magazines that want to write about men getting their backs waxed while guzzling beer and watching football games on television.
The shop has been enough of a success that it now has competition.
Another men’s grooming salon recently opened across the street. That space was formerly occupied by a candy store — an establishment I was never embarrassed to patronize.
In our ongoing efforts to report the latest innovations and techniques in the world of men’s grooming , we bring you this recent “stroke of genius” from a previously jolly British bloke. For years, we’ve been promoting the use of nail clippers at home for men. Only caveat is that we’ve strictly confined our clipping recommendations to the nail area (both hands and feet). Seems this fella hasn’t been reading our articles real closely. Enjoy, wince and learn…
