Hair America

While much of Manhattan is slowly coming to life on a recent Sunday morning, the Drybar in the Flatiron district is already humming. Actually it’s throbbing to an orchestra of blow dryers, pop music, even the occasional squeal. Inside, more than a dozen women are at various stages of Drybar’s trademark blowout routine: the style consultation (from a menu of five sleek looks, each named after a cocktail), the wash (finished off with a tightly coiled towel) and the product discussion (“How do you feel about hair spray?”). And then the coiffing commences. Drybar is strictly no cuts, no colors; stylists only wash and blow-dry. The Drybar way is a system of sectioning, pulling, pinning and curling, followed by a few adjustments and the final unveiling–a quick spin toward the mirror to behold a flawless head of hair.

At Drybar, a hair makeover like this is performed approximately every 45 minutes. One tall redhead walks in with frizzy and color-treated hair only to walk out with Kate Middleton’s silky tresses–and there’s nary a scissor in sight. By noon, the salon has served about 60 customers. “There’s nothing like a good blowout,” one stylist offered after finishing with a customer. “It gives you a real confidence boost.”

At a time when the country’s economic woes have depressed consumer confidence and the recovery in spending remains anemic, Drybar and its ilk are finding success by offering styling at a fraction of the price of full salon service–charging $40 compared with the $150 to $400 that a traditional cut can cost. In February celebrity stylist Rachel Zoe and her partner Robin Moraetes, a veteran of talent agency CAA, opened the first of two DreamDry salons in Manhattan. Other competitors include Boston’s Be Styled and Haute Air in New York. In Las Vegas these salons have begun popping up like so many Cher impersonators.

But Drybar is at the forefront of the quickly growing niche. Each month 70,000 customers walk into one of the firm’s 30 salons in six states. The chain’s 2,000 stylists perform 1.2 million blowouts a year. In 2012 it generated $19 million in revenue. This year, with 10 additional stores and a new line of hairstyling products, the privately held company will reach $40 million in sales, Drybar executives estimate.

Driving this trend is a shift in women’s grooming behavior and a greater emphasis on professional everyday styling over infrequent splurging. Styling–long the final step of the salon experience and time-consuming to pull off at home–has become more important, especially in the age of Instagram. In part, the shift is an extension of women’s outsourcing their beauty routines–getting manicures and waxes the same way they might send out laundry. (From 2008 to 2012, for instance, the manicure business grew nearly 20% to $7.47 billion in sales, according to industry publication Nails magazine.) “It has a lot to do with a change in habits,” explains Linda Wells, editor in chief of beauty bible Allure magazine. “Women are washing their hair less, and a blowout is relatively inexpensive compared to a salon.”

Empire of Air

Drybar’s creator is 38-year-old Alli Webb. In 2008 the former hairstylist launched a mobile salon, driving around her Santa Monica, Calif., neighborhood giving blowouts to her “mommy friends” in their kitchens and living rooms. She had been staying home with her two young sons and wanted to dip a toe into working again. Not long after, her husband Cameron designed a simple website to promote what was then called Straight-at-Home–a play on Webb’s specialty of taming curly hair. Inundated with requests, Webb realized her clientele was, like her, busy yet desiring professional-looking hair. But many upscale salons and discount chains left styling as something of an afterthought, focusing instead on big-ticket cuts and coloring or speedy service. “I realized there was a big hole in the market,” says Webb.

She approached her brother Michael Landau, a former Yahoo marketing executive, who was initially skeptical but put $250,000 into the venture. (Webb claims “women just got it” but says her male investors took some convincing.) Webb and her husband rounded out the seed money with $50,000–“everything we had,” she says. Even the landlord of Drybar’s inaugural shop in Brentwood, Calif., had doubts about the business’s viability. “He made me and my brother personally guarantee the lease,” she recalls.

Webb set out to design what she dubs the antisalon. “I wanted it to be fun, not a factory, and clean with pops of color,” she says. She and her partners tapped architect Josh Heitler, a friend, to create Drybar’s aesthetic in exchange for a 5% equity stake in the business. (Heitler’s designs include the W Hotel in Las Vegas as well as the Grand Central Terminal renovations in New York City.) The result was a look that mimicked a cocktail lounge, with each shop anchored by a central white marble “bar.” Behind, products line the shelves, and cords and hardware are hidden from view. Receptionists are called bartenders. Mirrors hang behind clients, adding a theatrical element to the final reveal. And chandeliers made from sunflower-yellow blow dryers grace the ceiling.

The experience mimics the perks of high-end salons. When a client enters a Drybar, she is offered a tray of cookies and complimentary champagne. “I wanted a space where everyone was nice,” Webb says. “I didn’t want women to come in and think they had to be fashionable or edgy to enter.” Webb geared the details to woo her core clientele–women like her. These so-called touch points include phone chargers at each chair (a convenience for on-the-go clients), discreet under-counter hooks to hold purses (to avoid having to drop a bag on the floor) and custom-made footstools at the shampoo station (affording comfort at the sink to women of all heights).

Drybar offers membership packages and e-mail follow-ups asking customers to rate the service, a tactic drawn from online shopping sites. “If someone has a bad experience, we want to hear about it,” she explains. “I want to make it right.” But the real innovation may be the firm’s business model. Because blowouts take much less time to perform than a traditional cut and color–about 40 minutes instead of 90 minutes or longer–each location can handle much higher volumes every day. Not stocking coloring supplies also cuts down on expenses. As a result, Drybar’s profit margins range from 15% to 35% per store. By comparison, the average for a full-service salon last year was 9.2%, according to Sageworks, a provider of private-business financial analysis.

Liftoff

Drybar’s debut wasn’t exactly smooth. The team initially franchised the concept in several cities in a bid to satisfy demand. Webb acknowledges that move was a mistake. “It’s tough to maintain consistency and control,” she says. (The energetic founder has been known to straighten picture frames and sconces when she visits shops.) In June, Drybar bought out its San Francisco franchise, but seven others remain. Webb says there will be no more Drybar franchises in the future. To help fund more company-owned stores, last year the chain sold a stake to Castanea Partners, a Boston private-equity firm, for $21 million. (Drybar declined to reveal what valuation that gives the overall business.) Landau, now the company’s CEO, says it should become profitable next year, just as Drybar mulls an international expansion.

It was Castanea partner Janet Gurwitch, a former CEO of Laura Mercier cosmetics and skin care, who nudged Webb to create Drybar’s line of shampoos, styling creams and styling tools. Introduced in April, those products are now sold at 140 Sephora stores and on shopping channel QVC. That line of business is expected to add $10 million to Drybar’s revenue this year.

While Webb did not invent the blowout–or for that matter, the blowout bar–she’s grown Drybar on the basis of women’s willingness to spend on hair care. According to market researcher NPD Group, women in the U.S. spent $103.8 million on hair-care products at upscale department stores alone last year. IBISWorld, a market-research company, estimates that U.S. salons will generate almost $50 billion in revenue by 2017.

Carolyn Hoffman, a high school principal, maintains a monthly membership at competitor Blo-Out Lounge in Valencia, Calif., where she gets her hair done five times a month. “My husband laughs when I go in on Sundays,” she says. “He calls it my happy time. But I can spend hours doing it myself and still look terrible. I feel more professional when my hair is looking good.” Allure’s Wells says, “It’s no accident that the term bad-hair day has come to mean more than just hair.”

Drybar and similar startups have not gone unnoticed by larger firms. The simplicity of the model makes it easy to copy. Higher-end salons have already tried to go after the nascent blowout market. Last summer Frédéric Fekkai (famous for introducing the $200 haircut) opened a pop-up blowout salon at his eponymous Fifth Avenue hair mecca. He later opened Fekkai Blow Out Bar–offering his take on the trend for $50. The shop closed when the novelty apparently wore off, but there are plenty waiting to take its place. Similar services have popped up around the country, some undercutting Drybar in price by more than half.

At a downtown Manhattan Drybar, Amber Roberts, a corporate-bond broker, is having her long swirls of blond transformed into a bouncy coif. After trouble getting an appointment at her regular salon, she began dropping in here. Now she comes in twice a week. “I walk out clean and fresh and not like the mom of a 2-year-old,” she says. She notes that she’s lucky to be able to afford what she calls “this kind of luxury” before quickly adding, “For me, it’s essential.”

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