“People are going to color their hair no matter what happens,” says Amy Errett, the founder and CEO of Madison Reed. “I used to say, ‘There could be a massive earthquake. She’s going to color her hair.'”
Errett’s thesis was put to the ultimate test during the pandemic, when salons across the country were forced to close last spring. If Madison Reed’s sales are any indication, Americans didn’t stop dyeing their hair. Quite the opposite, in fact: The hair-color startup—known for its affordable, high-quality dyes, but without the harsh ingredients—grew by 130%, earning more than $100 million in revenue and nearly doubling its customer base. When sales were surging last summer, Madison Reed also launched a men’s line of products, which reportedly earned the company $2 million in about six months.
“Now I can add, ‘They’re going to color their hair during a pandemic,’ and I would be accurate,” Errett says. “[Dyeing your hair] is about how you feel emotionally about yourself.”
Prior to the pandemic, Madison Reed had 12 Color Bars, where customers could quickly refresh their hair color with professional colorists. (Madison Reed also sold its products in more than 1,200 Ulta stores.) When Errett shuttered all locations last March, she retained all staff, transferring them to Madison Reed’s call center to advise customers on their at-home dye jobs. But she pressed on with plans to expand Madison Reed’s brick-and-mortar footprint, closing out the year with 35 salons.
Some investors balked at her decision to invest in physical salons in the midst of a pandemic that showed few signs of abating. “Last summer, every private equity investor that contacted me—which was, like, a gazillion—was highly critical of us continuing to open stores,” Errett says. “They were like, ‘You’re nuts. Retail is dead.'”
But Errett had a hunch that, eventually, customers would be clamoring to return to salons, even those who were first introduced to Madison Reed products during the pandemic. “We’re seeing a ton of people that used our product during COVID who said, ‘I don’t want to put it on myself anymore,'” she says, “and they’re coming in droves to our hair-color bars.”
With the pandemic recovery underway, Errett is doubling down on Madison Reed’s Color Bar expansion: In February, the company closed a funding round of more than $50 million, part of which will go toward rolling out more than 15 new salons this year. Errett is also building a video consultation service—an evolution of Madison Reed’s call center—to court customers who prefer to dye their own hair but want some handholding.
“We have more demand from the client side than we can service right now,” Errett says. “It’s a good problem to have.” Like restaurants and other employers in the service industry, Madison Reed has found it harder to recruit workers, even amid high unemployment rates. But Errett is confident that it’s only a matter of time. Madison Reed offers full benefits and competitive pay, at about twice the market rate for colorists, according to Errett. The company is also investing in career development for colorists who want to move into management or product development. Some colorists have already taken on roles as store managers or trainers; others have pivoted into research and development. “Our biggest challenge,” Errett says, “is to have the stylist and colorist community understand that we are a home for them for a career path.”
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