Diane Mastrull: Budget-wise beauty

Long before Groupon, mobile apps, and businesses' embrace of the Internet as an advertising tool, Anthony Rossano became a salon owner.

That was nearly 23 years ago, when the hair-care industry was a modest world.

Considering themselves artists, stylists were repulsed by the idea of marketing for customers. After all, did Andrew Wyeth or Pablo Picasso take out ads to attract buyers for their creations?

So Rossano made a lot of hairs stand on end when he went from hands-off investor to operator of the chic Thomas Bernard's salon in Cherry Hill - now known as Bernard's Salon & Spa - when its namesake died in 1990.

Rossano, whose expertise was real estate investment and who had never snipped a hair professionally, decided to market aggressively through direct-response mailings and giveaway neighborhood newspapers to bring in new clientele, even offering 50 percent off for newcomers.

"It was almost at the point where there was going to be a mutiny," he said of the response from his staff of 16 at the time. "Twenty-three years ago, the mind-set was 'Referral Only.' "

Other salons objected, too, accusing Rossano of cheapening the industry. But he was vindicated, attracting 300 new clients the first month and watching business expand enough to support adding a spa division and, 10 years later, a second location in Marlton.

Now, with 200 employees, Rossano, 48, is adjusting his business model again - and, again, it involves advertising. Today's advertising, centered on social media, has created "a different shopper" for salon services, he said - one driven by price, but not necessarily loyal to a retail brand.

In March, July, and November of last year, Rossano launched a $1 million expansion with the debut of three new scaled-down, "affordable-luxury" salons known as b2 in Cherry Hill, Washington Township, and Philadelphia.

They do not include spas or vast legions of staff. In b2, the same person who colors your hair will cut it and likely wash it. One continuous "blow-dry bar" is in place of individual styling stations. Each salon - including room for body and facial waxing - is contained in roughly 1,500 square feet, a petite footprint compared with Bernard's 5,000-square-foot expanse in Cherry Hill.

"The difference 23 years taught me was smaller can be better than bigger - but just a lot of smallers," Rossano said.

From that size concession comes a price break. While a haircut in Cherry Hill could start at $65, at the b2 salons in South Jersey, the minimum price for a cut is $35; in Philadelphia, where rents and other costs of doing business are higher, it's $55.

It has been a tough time in the salon industry, with three straight quarters of decline in business indexes in 2011, said Brad Masterson, spokesman for the Professional Beauty Association in Arizona, which represents more than 100,000 salon and spa owners and products manufacturers.

The group estimates 861,400 salon-industry establishments in the United States, with beauty salons and spas constituting 70 percent of them. The rest are nail salons and barbershops. Total salon-industry sales were $39.8 billion in 2007, the most recent year for which data were available.

Last year, Rossano's annual sales were $3 million.

Hair salons that survived the recession likely are those that benefited from strong relationships between customers and stylists, Masterson said. That's the kind of relationship-building Rossano believes his b2 salons are ideally sized for and designed to encourage.

Also helping hair salons through the recession was the emergence of the "blowout bar phenomenon," Masterson said. Especially popular in Los Angeles and New York, these are salons that offer only blow-drying services, usually for about $30. That has especially appealed, he said, to working women who, for instance, need a quick styling before a business meeting, and to people who are open to trying something new but not necessarily ready to give up their stylists.

Doing business in Philadelphia is something new for Rossano, even though he grew up in Society Hill and attended St. Joseph's University. His salon on the ground floor of developer Carl Dranoff's new 777 South Broad apartments will get a lot of Rossano's attention - he and his wife and business partner, Carla, live upstairs.

Not that that made Rossano's salon a shoo-in with Dranoff, who is offering a total of 19,000 square feet of retail at 777, much of it still vacant.

"I'm very selective about who goes into our retail space," Dranoff said in an interview Friday. "We want to make sure the quality, the presentation, everything is consistent with the main part of the building. We're creating neighborhood destinations."

So first, Dranoff listened to a presentation by Rossano, then sent a delegation to check out his New Jersey operation. He was quickly impressed and offered Rossano a multiyear lease, calling him "the quintessential entrepreneur" who "exudes energy."

Rossano has a lot of ideas for helping reach his goal of attracting 60 to 70 new clients a week. That will start with accessibility. The new salons will be open seven days a week, some days until 9 p.m. When the weather gets warmer, chair massages will be offered on 777's rooftop deck.

Rossano also is in talks with physicians about offering Botox injections and laser hair-removal services.

What Dranoff won't be offering Rossano is his own head of hair for cutting.

As the Professional Beauty Association's spokesman noted, the salon industry is built on relationships.

"She's been doing it for 15 years," Dranoff said of his stylist at Style of Man at Liberty Place. "She's secure."

Anthony Rossano introduces his newest site, b2 Salon, on South Broad Street. Watch a video at

philly.com/business

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