Shear Business: Can the divorced founders of Hair Cuttery run their salon chain together?

Can a divorced Washington couple successfully run a chain of hair salons?
By Ylan Q. Mui
Sunday, July 11, 2010

Newlyweds Dennis and Ann Ratner were having dinner at a fancy restaurant one evening in 1973 when the conversation turned to their jobs.

Then about 30, Dennis worked for his father's chain of Washington area beauty parlors, Louis Creative Hairdressers, but he was ready to strike out on his own. Ann, also 30-ish, with long, layered blond locks, was uninspired by the conservative cuts at the downtown Washington beauty salon where she was a stylist. The couple agreed: It was time to break free.

They jotted down on a cocktail napkin their ideas for a new kind of hair salon. Ann wanted something more traditional, mid-priced, with a receptionist taking appointments. But her husband had studied McDonald's closely and homed in on the principles that he believed had turned the fast-food chain into a global phenomenon: Not only did McDonald's serve good food at a reasonable price, but customers always knew what they were going to get.

That, the Ratners agreed, would be their model: convenience, price and consistency.

Business would be strictly walk-in. They would go after kids by offering $2 and $3 haircuts. Moms surely would follow. The central locations and casual atmosphere would draw the dads.

Unsure their idea would fly in a generation conditioned to fussy beauty parlors and clubby barber shops, the Ratners opened their first salon in West Springfield in 1974. Before the year was over, they opened two more. "We knew we wanted to change the industry," Dennis says. "There was nothing holding me back."

Today, the Hair Cuttery empire spans 12,000 employees, roughly 1,000 shops in 16 states, and generates $400 million in revenue, Dennis says. Its brands include the mid-priced Bubbles salons, the high-end Salon Cielo and its own line of hair-care products, Cibu. The chain has gained new currency during the economic crisis as consumers trade down to the chain's $16 haircuts. (One of its TV commercials boasts the slogan "Still Smart.")

Hair Cuttery also is the nation's largest chain of family-owned salons.

Family -- that's the tricky part. Ten years after the first salon opened, Dennis and Ann Ratner divorced. Even as the couple walked away from their marriage, they vowed to cling to the business as if it were one of their two children. But the future of the family enterprise seemed to rest on a single question:

Was it possible to run a company with your ex?

***

Ann was a headstrong London hipster when she moved to Washington in 1967 in her early 20s in search of a new adventure. A friend was supposed to move with her but changed her mind at the last minute, so Ann decided to strike out alone.


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