US Salon Trends Indicate Looming Recession

“It’s feeling a lot like 2008,” said Christy Powers, who’s worked through three economic downturns since 1999. Operating out of Frederick, Maryland, a commuter-train ride from Washington, Powers said more and more of her clients — especially the large swath of federal workers — are “coming in telling me how stressed they are.” Others are halting services altogether to save cash.

Is Powers a financial planner? A real estate agent? Nope: She’s a massage therapist, and she and her service-industry colleagues working in beauty, hair and personal care have been witnessing firsthand some of the earliest possible signs the US is tumbling into recession.

Powers was one of more than 32,000 spa technicians, hairstylists, colourists and makeup artists who recently streamed to New York’s West Side to attend a three-day trade show for professionals with one shared mission: making clients look and feel good. That gives them an intimate, up-to-date perspective on the mood of the American consumer, and what they’re seeing is ugly.

Stylists from Manhattan to rural New Hampshire are seeing regular clients start to skip cuts and blowouts. In from the Maine town of Brewer, hairstylist Alyssa Dow said customers are choosing cheaper, “more low-maintenance” looks — and tipping less. In affluent Longmeadow, Massachusetts, where “people don’t like to walk around with roots” showing, clients who previously got colour every two or three weeks are stretching it to four or five, citing the “political situation” and implying they’ve lost money in the stock market, said Michelle LaValley. “They’re cutting back in other areas as well, so it’s not just us,” said the salon owner, who has 28 years in the business. The wider pullback in spending seems to go beyond the general grumpiness that accompanied the so-called vibecession that started years ago when inflation rose, interest rates spiked and yet the US kept growing.

Longtime clients are “spending less because of the economy,” said Cynthia Almonor, an aesthetician with 15 years of experience in Brooklyn. “I’ve been eliminated from their budget.” It echoes 2009, when the media dubbed a do-it-yourself styling phenomenon “recession hair.”

Whether this is the opening scene of a full-blown recession, though, we won’t know definitively for months. That’s because official economic data can take forever to reflect reality, especially if conditions are changing rapidly. When the National Bureau of Economic Research made the Great Recession official in December 2008, its Business Cycle Dating Committee recognised the US economy had actually been contracting for an entire year. That’s where nontraditional indicators like visits to nail salons or barbershops can come in handy. “The first thing people are going to give up is their massage,” said Brian McGee, president of Phoenix-based beauty-industry consulting firm BAM Navigation LLC.

To be sure, not everyone was reporting a pullback on the sidelines of the New York International Beauty Show and accompanying International Esthetics, Cosmetics & Spa Conference in late March. Hundreds of vendors were eagerly and optimistically promoting thousands of products, and attendance was up 6 percent from last year, according to organiser Questex. “I’m pretty much busy all the time” with clients, including many doctors and lawyers, who seem insulated from any downturn, said Elizabeth Ehrgood, an aesthetician in Scranton, Pennsylvania. Alex Romero, a barber in Hamilton, New Jersey, hadn’t seen a drop-off either: “People are still trying to feel good in uncertain times.”

Those times got even more uncertain in the weeks after the show, when President Donald Trump’s on-again, off-again plans for tariffs caused chaos in financial markets. Beyond any cut to household discretionary spending that the stock market mayhem might kick off, the tariffs also threaten to raise operating costs at salons and spas. The lifeblood of the beauty industry comes from oils, lotions, creams and gels with dozens of ingredients sourced from all over the world. Some chemicals, as well as packaging materials, are really only available in China, McGee said. Trump’s latest tariffs peg China duties at 145 percent. “People right now are blissfully unaware of the impacts this is going to have on their business,” he said, noting it can take as long as six months for tariffs to fully “hit the marketplace.”

Worried about a slowdown in her company’s direct-to-consumer business, Akua Okunseinde, chief creative officer at New Jersey-based Karité, set up a booth in the convention hall hoping to diversify revenue by also selling to spas. Karité’s main product, a shea butter cream sourced from Ghana, comes in a jar with a distinctive bamboo top imported from China. “It’s hard to think about moving away from that,” she said.

The good news for the industry is that profit margins on its products can be large, something you can’t say for every category that’s vulnerable to tariffs. “There’s a good markup in our industry,” said Allan Share, president of the Spa Industry Association, a trade organisation. Derme&Co., a Canada-based maker of skin-care products whose booth occupied a prominent spot at the spa show, has stockpiled twice the typical inventory in its US facility in case of tariffs, according to its president and chief executive officer, Amir Hussein. “But if you ask me are we going to increase our prices? No, we’ll probably absorb it,” he said.

Another source of optimism is the affluence of the industry’s core clientele. As costs have risen, many high-end spas have “raised prices two, three, four times over the last few years,” Share said, and customers “don’t seem to be bothered by it at all.”

But middle- and lower-income customers might be. Well before the tariff threat, some clients were already losing patience with higher prices, said Sydney Jackson-Green, who’s studying cosmetology in Springfield, Pennsylvania. She had to raise fees because of “outrageous prices” on products, and she finds even a $12 to $20 increase can be prohibitive for her typical twenty-something client. To save money, some customers are trying to color their own hair. At least that brings in business: After they try and fail to do it on their own, they pay Jackson-Green to fix their “home disasters.”

By Ben Steverman

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