Speaker 1: This is Bloomberg Business Week with Carol Messer and Jason
Speaker 1: Kelly on Bloomberg Radio. All right, so I have been
Speaker 1: the beneficiary of this company's good work. There. Look, we're
Speaker 1: talking about Great Clips. The CEO is here, Steve Hackett
Speaker 1: is his name. He's based out in Minnesota in the
Speaker 1: Twin Cities area. He's here with us in New York
Speaker 1: City today. Steve. Great to have you with us. Thank you,
Speaker 1: It's great to be here. How crazy is it for you?
Speaker 1: For I'm just gonna ask you how crazy is it
Speaker 1: for you guys? Right now? It's really crazy. I say
Speaker 1: your team in our our green room, and they're like,
Speaker 1: we've been NonStop. Yes we have. We have, and we've
Speaker 1: got across the U. S And Canada. The franchise is
Speaker 1: they employed forty thousand stylus. We do over two million
Speaker 1: haircuts a week. So there's a out of moving parts
Speaker 1: that we've got to manage as we represent the Great
Speaker 1: Clips brand. Are you down? Not yet? What we want
Speaker 1: to do? The reason I'm here in New York we're
Speaker 1: headquartered in Minneapolis is we preach balance and calm, and
Speaker 1: we also want to be smart and forward thinking and
Speaker 1: we want to be nimble, um, and I wanted to
Speaker 1: come out of rather than saying, hey, I'm gonna avoid
Speaker 1: New York City, because that's what we talked to Our
Speaker 1: franchise is about. We we want to do the right thing,
Speaker 1: but we want to have what I call an agile
Speaker 1: mindset to what a good decision today maybe a different
Speaker 1: decision tomorrow. And the decision I'm making for tomorrow may
Speaker 1: have to change by tomorrow night. And that that agile
Speaker 1: approach is key as we're a retail business and people
Speaker 1: have to put their hand in our door handle to
Speaker 1: come in. But at the same time, we are going
Speaker 1: to be careful and we're gonna be our customers. We
Speaker 1: want to protect our stylus. We we have that care
Speaker 1: as an element of who we are. And so it's
Speaker 1: a balance that right, Well, and let's take it a
Speaker 1: step further. In addition to you know, people putting their
Speaker 1: hand on your door handle, you know, getting a haircut
Speaker 1: is a pretty intimate act, you know, darn. You know,
Speaker 1: like there's a lot of like human to human contact
Speaker 1: and something you know, in the age of social distance
Speaker 1: that we're worrying about. You also have a franchise system.
Speaker 1: How do you sort of ensure that everybody is doing
Speaker 1: the right thing well on the first point, on the
Speaker 1: social distance, it is interesting to hear people talk about
Speaker 1: stay six ft apart, three ft apart. Well, a haircut
Speaker 1: your zero right. So we cleanliness, sanitizing. I mean, that
Speaker 1: is a big part of what we have done since
Speaker 1: our start. It's what all hair salons do. I mean,
Speaker 1: our stylists are very skilled at the cleanliness and sanitization
Speaker 1: because we do that every day. We are ramping it up.
Speaker 1: How do we do more? How do we have more diligence?
Speaker 1: Do more of that now? But that's a key thing,
Speaker 1: So Jason, as we work with our franchise e s,
Speaker 1: we we we we explain that, but we give them tools.
Speaker 1: And we have a big community Asian going out literally
Speaker 1: in the next forty minutes to our franchisees and and
Speaker 1: uh and so how do we communicate with them and
Speaker 1: give them tools so they can deal with their staff
Speaker 1: and and be pillars in their community, but yet be
Speaker 1: smart about this whole situation. Hey, I gotta ask, is Steve.
Speaker 1: One of the conversations we've been having here in the
Speaker 1: newsroom is Okay, so what do you do you know
Speaker 1: some of us work for companies where if we stay home,
Speaker 1: we're gonna get paid and there's no problem about that.
Speaker 1: We can make the mortgage, we can pay our bills,
Speaker 1: no matter kind of how long this goes on. For
Speaker 1: a lot of workers are hourly workers that if they
Speaker 1: don't show up, they don't get paid. So I'm curious.
Speaker 1: Tell me about your policy that you want a sick
Speaker 1: worker to stay home, but they might not because they
Speaker 1: need They know they need to come to work because
Speaker 1: they can't afford not. So what are you doing to
Speaker 1: ensure that workers who maybe should stay home due Um,
Speaker 1: I'm just curious. Yeah, And it's it's what we're faced with.
Speaker 1: We have great jobs and great clips, salons and and uh,
Speaker 1: as I said, we have forty stylists, but they are
Speaker 1: hourly wage workers. That's just the great jobs. But there
Speaker 1: are early wages, so that is that balancing act. I'm
Speaker 1: talking about where they want to work because that's they
Speaker 1: don't want disruption. But yet there is disruption, and there's
Speaker 1: epicenters around the country, and and we work with franchise
Speaker 1: e s. How do they how do they move staff
Speaker 1: between their salons if they can, how do they kind
Speaker 1: of handle reducing hours possibly rather than just laying off people,
Speaker 1: how do they uh manage and work? Because when this passes,
Speaker 1: they want to ramp back up. So the goal here
Speaker 1: isn't for franchise e's. They're not just saying I'm going
Speaker 1: to get rid of employees. They're struggling with it because
Speaker 1: they want to keep employees. They know that their livelihood
Speaker 1: is based on being paid. But tips are down, and
Speaker 1: so how do you don't have a policy to say, listen,
Speaker 1: you're sick, you can stay for you. Well, the franchise
Speaker 1: see again that that we have the layer where the
Speaker 1: employees aren't Greek clips and employees and a franchise system
Speaker 1: of the employees of the franchise. So we work with
Speaker 1: the franchise's to say, hey, if your employees are sick,
Speaker 1: suggests they stay home. They have to do that, that's
Speaker 1: the smart thing to do. But the employees have to admit, hey,
Speaker 1: I'm not feeling well. I mean, we don't have we're
Speaker 1: not franchisees aren't taking temperature. So will the franchisees pay
Speaker 1: them if they stay home? Some of them will, and
Speaker 1: I know some of them are doing that, and that
Speaker 1: they're saying, how do we I want this employee to
Speaker 1: be a great employee and this is unfortunate that they
Speaker 1: don't feel well in this situation, So how do I
Speaker 1: keep them? And some will absolutely pay their employees in
Speaker 1: a self quarantine or stay home because frankly, we have
Speaker 1: more customers coming into our salons and the first ten
Speaker 1: months of this year have been awesome, best best first
Speaker 1: ten weeks, excuse me, not months, ten weeks, then the
Speaker 1: last four or five years, and now this coronavirus is
Speaker 1: going to take the edge of but we know when
Speaker 1: this passes, if it does sixty days, ninety days, five months,
Speaker 1: customers are going to come roaring back. Because we're we're
Speaker 1: normously don't know that yet through last Friday, uh and
Speaker 1: the Great Clips Business weekends on Friday, we've had a
Speaker 1: great start to the year. Do I expect that the
Speaker 1: slowdown when you've heard all the cancelations today? I mean
Speaker 1: Ohio even closed their schools this afternoon and right, and
Speaker 1: so that's going to have an impact, and we do
Speaker 1: not have our heads in the sand. You are listening
Speaker 1: to Bloomberg Business Week still with a Steve Howckett, CEO
Speaker 1: of Great Clips, and Steve, I'm guessing you thought, wow,
Speaker 1: we've got these great partnerships lined up. NHL, people love hockey.
Speaker 1: You had a really cool like hashtag hockey hair uh
Speaker 1: thing going on promotion that leverages social media, March Madness,
Speaker 1: best time of the year. Well here we are, no
Speaker 1: March Madness, NHL suspending its season. How do you react
Speaker 1: to something like that. It's really interesting. It's moving so
Speaker 1: fast because yesterday the n C Double A was doing
Speaker 1: no fans and stands and and when we started, yeah,
Speaker 1: but we could work with that and uh and in
Speaker 1: the NHL had still there, hadn't suspended their season, and
Speaker 1: then you know, by a little bit ago with the
Speaker 1: n C Double A canceling March Madness, Yeah, we're done.
Speaker 1: We love both of those those uh entities, those groups,
Speaker 1: the n C Double A, the National Hockey League, what
Speaker 1: they represented to our our customers, because our customers are
Speaker 1: their fans and their fans are our customers across the U.
Speaker 1: S And Canada for both. We're excited to launch this
Speaker 1: n C Double A March Madness partnership and it's really
Speaker 1: a multi year relationship with all in n C Double
Speaker 1: A Sports starting now. Yeah, we're it's a bit disappointing,
Speaker 1: but we understand because the the the health of the fans,
Speaker 1: the health of all the athletes in both sports is
Speaker 1: really key. Well, it's a reminder that you know, we
Speaker 1: tried to figure out the costs of the virus, and
Speaker 1: we understand when events don't happen or you don't take
Speaker 1: a trip or so and so forth. But right this
Speaker 1: is kind of antillarya in terms of revenue generating, right
Speaker 1: for you guys, But it's going to impact it sure
Speaker 1: because you do these partnerships and sponsorships because you want
Speaker 1: you want to grow your business. Right well, yes, exactly,
Speaker 1: and you want to grow your business. So the fact
Speaker 1: that there the n C Double A canceled, March Madness
Speaker 1: is gone. We're gonna still work with the n C
Speaker 1: Double A, and we hope next year with Martin Magin
Speaker 1: March Madness, we come out. All of us are going, hey,
Speaker 1: I'm my bracket. I can't wait. Um. But the NHL
Speaker 1: depends on how this coronavirus plays out over next couple
Speaker 1: of months. They may have some of their playoffs, they
Speaker 1: may have a way to do that, and we're working
Speaker 1: with them and and if they do that, we will
Speaker 1: be a part of that, and we're we would be
Speaker 1: excited to to continue to leverage that relationship. So what
Speaker 1: would you say is that the thing that is most
Speaker 1: misunderstood about your business at this point? I mean haircuts.
Speaker 1: You can't take them online, so you don't need to
Speaker 1: worry about Amazon necessarily getting into your business. Uh, hope,
Speaker 1: hope um. And to leave me as someone who is
Speaker 1: a great Clips, longtime great Clips customer. I've tried it
Speaker 1: at home even with my complete or almost total lack
Speaker 1: of hair, I still look better if I have a
Speaker 1: professional do it. But what's a challenge that, Well, you
Speaker 1: get your hair cut like every week or two weeks. Yeah,
Speaker 1: what's at a number two or three all over? Let's
Speaker 1: say it's a one one and a half. Okay, I'm
Speaker 1: not a stylust now close. Yeah it's a little long clippard.
Speaker 1: We're talking about clipper guard carols. Like, what are these
Speaker 1: numbers make? I have no idea what you're talking about. So, yeah,
Speaker 1: our our business is uh, it's an awesome business because
Speaker 1: we deal with every day. But you started as as
Speaker 1: a franchise, started as a franchise as twenty seven years
Speaker 1: old in low number hundred and fifty and now we
Speaker 1: have over so I've seen Great Clips grow and expand
Speaker 1: and I've been there, not at the start, but when
Speaker 1: we already going kind of the frontier days and now
Speaker 1: we're very well established. UH and so it is it's
Speaker 1: a we Last year we did hundred and twelve million haircuts.
Speaker 1: This year a hundred hundred and twenty million haircuts. We
Speaker 1: touched people insuing stat um last year we had thirties
Speaker 1: six million unique customers come in, so out of the
Speaker 1: US and Canada, that's almost ten percent of the population
Speaker 1: was a unique customer to Great Clips. And we're just
Speaker 1: the small little franchise system out of the heartland that's
Speaker 1: the biggest hair care chain and uh in North America
Speaker 1: but basically the world. Two quick questions, husticky is it
Speaker 1: once you get a cut customer, how long do they
Speaker 1: stay with you? And how much you know does it
Speaker 1: then extend to the broader family and that kind of
Speaker 1: thing and your app? How does that help in driving business?
Speaker 1: Because digital is so so the first part Um. We
Speaker 1: we we track our customers. Every customer comes in, we
Speaker 1: know when they come in, we know when they come back,
Speaker 1: We track if they come back within a set period
Speaker 1: of time. We know that that's important to growth. We
Speaker 1: know when people come in and then don't come back
Speaker 1: on their cycle, which means they probably to a competitor,
Speaker 1: So how do we market to them. We know a
Speaker 1: customer comes in seven or more times a year, we
Speaker 1: call him a great customer. Is awesome. They're probably coming
Speaker 1: to us for every one of their haircuts, thank you,
Speaker 1: Jason um And and so we track all that because
Speaker 1: we have the data and that that is very important
Speaker 1: to us. Again, we're a haircut, but we're we innovate
Speaker 1: around that haircut with technology and we know our customers
Speaker 1: and so the app can totally change our business. We
Speaker 1: have twelve and a half million downloads of the app
Speaker 1: right now. We do about two and a half three
Speaker 1: million downloads a year. But it's really that you can
Speaker 1: check your weight times and then you can get on
Speaker 1: the wait list, so you on your time, you burn
Speaker 1: up your any weight that you have versus citing in ours.
Speaker 1: That was the brilliant that that's the brilliance of it
Speaker 1: is is the weight time. Yeah, And the key for
Speaker 1: us and CURL to your point is seconds. The algorithm works.
Speaker 1: That's the key to online checking all right, you're gonna
Speaker 1: have to come back and see us. We've got a
Speaker 1: lot more questions for you. Really appreciate the visit. Steve Hockett,
Speaker 1: CEO of Great Clips, and good luck through everything because
Speaker 1: I know it's a tough time for everybody.