The best-laid plans of many salon owners were put on hold by the pandemic, including Luke Huffstutter’s ambitions for Annastasia, his two salon group in Portland, OR. But COVID wasn’t all bad. Those few months of forced leisure, while paralyzing, did give some owners time and space to review systems and procedures and explore technology that could assist growth. For Luke, the breakthrough technology was Vish and it gave him a unique insight into the scalability of his business model.
The Systems Fixer
“During the pause that COVID created, I found Vish. It is an amazing systems fixer. It gave me the detail I needed to secure scalability and facilitate our growth. It has substantially decreased waste but, more importantly, it’s allowed me to overhaul our pricing structure, identifying where my biggest costs are and inject a layer of profitability into every service,” says Luke, who bought the first Annastasia with his father, Vince, and his brother, Keith, in 2006. “Color is our second largest cost after wages so bringing down its overall cost has been a major win for us.”
Pricing for Growth
Annastasia’s new price structure has an allowance for color embedded in each service, but if extra color is needed and dispensed, those costs are passed on to the guest. As a result, the average ticket price has increased by $20 between 2020 and 2022, while the clientele has grown. The higher sales have meant higher commissions for the stylist, helping team retention and increasing profit for the group.
Luke comes from a family immersed in the industry. His great-grandmother was a hairdresser and she taught the craft to Luke’s grandfather. Their son Vince, Luke’s father, grew up in beauty, becoming a salesman before eventually buying a distributorship. He met his future wife, Luke’s mother, who was a hairdresser at a hair show, and all of Luke’s older siblings were employed at the distributorship until it was sold in 1999. Luke knows the industry, and his knowledge has been fundamental in laying the foundations for Annastasia, which currently has sales of nearly $5 million.
Expansion through Acquisition
Luke’s goal was always to expand through acquisition. The first salon was purchased in 2006 from an owner keen to retire and came complete with a team and clientele. A year into ownership, Luke purchased a new 3,200 sq ft salon, relocating the whole business and merging both teams. With 21 stations and more than 30 hairdressers, the large flagship Annastasia has been a crucial link in the brand’s scalability through its associate program.
Our revenue enables us to run a residency program for new associates,” explains Luke. “Every recruit is paired with a senior stylist for seven months, providing a second pair of hands to help drive sales while they learn from their mentor and build up their own clientele.”
Luke was able to utilize the team at the flagship location to seed the second salon, which opened in 2021. Within months, the original salon was back up to full capacity, with a total of 52 hairdressers across both locations. Luke has since been building towards seeding a third salon which the company has scheduled to open early in 2023.
But this isn’t the only evidence of a long-term focus on scalability by Luke, his father, and his brother. The company is structured to grow and retain leaders through its shareholding strategy. Shares were first sold in 2014, again in 2016, and most recently in 2021. The shares pay dividends from sales and growth to those who have reached the pinnacle of their career within the company, reinforcing the benefits that come with staying with the company for the long term. Future salons will be managed by these home-grown, dedicated shareholders.
The Sky’s the Limit
Over the past five years, the value of Annastasia’s shares has increased tenfold as sales and profits have skyrocketed. Vish has been instrumental to that growth, helping Luke secure guaranteed profit from every service, control inventory, and keep color costs down. But so, too, has the group’s robust talent development and its leadership retention strategy. There’s little doubt that Annastasia will achieve its growth plan of one new salon per year over the next 10 years. For the rapidly growing company, the sky’s the limit.
