Alli Webb, a former hairstylist, built Drybar, a 32-store chain of salons that offer $40 blowouts. She says repeat clients are one of the keys to sustaining the business, as women pursue an affordable luxury

Hair Chain Drybar Finds Niche in Affordable Luxury

Co-Founder Says Repeat Clients Provide the Lift to Sustain Business on $40 Blowouts

CAITLIN HUSTON

Nov. 20, 2013 8:37 p.m. ET

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Drybar entrepreneur Alli Webb: ‘We’ve changed behavior, which is really amazing and humbling…. We are kind of like the fabric of people’s lives.’ Annie Tritt for The Wall Street Journal

Alli Webb started a door-to-door hairstyling business in 2008 as a way to get out of her house and take a break from rearing her two kids. The former hairstylist saw the need for a service that focused on providing affordable, high-quality blowouts—in which a client’s hair is washed and blow-dried into a style, without being colored or cut. The business spread through word-of-mouth, and Ms. Webb soon found herself unable to keep up with demand. Her side project turned into a company with a projected $40 million in revenue this year.Drybar Holdings LLC, which opened its first shop in February 2010 in Brentwood, Calif., now has 32 locations across the country. The business is about to go through a management transition, bringing in John Heffner, former president of nail-products maker OPI Products Inc., as chief executive, starting Dec. 2.

Ms. Webb said she and her team had always planned to bring on a new CEO who had “different skill sets and the experience” needed to manage the growing business.

Drybar has a staff of 2,000, including corporate employees and its stylists, all of whom work as hourly employees, rather than as independent workers, as stylists typically do. About half of the stylists are part time. At each location, clients have their choice of blowouts for $40 from a menu with cocktail-themed names.

The 38-year-old Ms. Webb runs the business with her brother, Michael Landau, 42, the company’s current CEO, who will become executive chairman in the transition, and her husband, Cameron Webb, 39, who left a career in advertising to become Drybar’s co-founder and creative director. They all chipped in money—Mr. Landau was the main investor, and Ms. Webb and her husband contributed their life savings—to open the first store.

Later, Drybar got $1 million in funding from friends and family, followed by $2.5 million from angel investors. It then raised $21 million from Boston-based private-equity firm Castanea Partners Inc. from 2011 to 2012.

In April Ms. Webb launched a line of hair-care products, including the store’s signature yellow hair-dryer called Buttercup, which is sold online, at Drybar locations, on shopping channel QVC and at 140 Sephora stores.

Ms. Web recently spoke with The Wall Street Journal about Drybar’s strategy and how it aims to stand out from the competition. Edited excerpts:

WSJ: You recently raised your prices across the board to $40 a blowout. Why the increase?

Ms. Webb: We always were $40 in New York. We tried to keep prices $35 [elsewhere] as long as we could, but you know things go up: rent, health insurance, incentives. There’s just a lot of different things that got more expensive. We had to raise the prices to keep the business model as it was.

WSJ: How do you make a sustainable business out of $40 blowouts?

Ms. Webb: We’re averaging, depending on the day, between 60 and 100 blowouts per shop per day. And we’re getting repeat customers. It’s become a habit.

We’ve changed behavior, which is really amazing and humbling that we’ve been able to do [that]. We are kind of like the fabric of people’s lives. We’re doing blowouts for women before they go on a date, before they go to a meeting, after they drop a kid off at school and they just want to feel good. So it’s become kind of an affordable luxury.

WSJ: With the rise of other blowout salons, how does Drybar differentiate itself from competitors like Blo and DreamDry?

Ms. Webb: I think that we stay really focused on what we do and keep our heads down. We’re probably our harshest critics and always trying to make things better.

It’s a tough business to run. We’re so obsessed with so many little details, everything from customer service to hair. That separates us.

It’s probably the customer service and how we really do bend over backward for people. The blowouts have to be really great and the customer service has to be even better.

WSJ: What was the hair-product-development process like?

Ms. Webb: The process really was figuring out what those products were, then talking to the labs and giving them all the detail I could about what [I] wanted. Then [it was] getting samples back, getting to the point where I personally liked it, and then putting it into my shops and letting my stylists try it. Clients love that too, and there would be product samples floating around the shop, and the stylists would try it on some clients who were game, and most were. Stylists are very honest people and they tell you “We hated it. We loved it. Here’s why.” And I have them fill out a form that gives me as much information as possible.

WSJ: What’s your biggest challenge?

Ms. Webb: It’s scalability and being able to keep the trains moving and keep the standard where we want it to be. There’s just a lot more moving parts. That’s a big challenge that we face literally every day: keeping our managers [doing] what they’re supposed to be doing and keeping the stores looking good. It’s keeping and maintaining the very high standard that we have.

WSJ: Drybar is very involved on Instagram and TwitterTWTR -1.68% How has that become part of the business?

Ms. Webb: I’m very particular about what we put out there. Even on Twitter, I personally respond to a lot of the tweets that we get. And I think that’s impactful. I think I do that as much as I can because I know how it feels. You reach out to a company and you just expect that no one will ever get back to you.

WSJ: Do you still consider yourself a startup?

Ms. Webb: I don’t consider us a big company. It still feels very mom and pop to me. I know it’s not, but it still has that startup feeling, which I don’t ever really want to lose.

I think there’s still so much learning. I don’t think it’s like we’ve fleshed it out, and we know exactly what we’re doing. I think there’s just kind of that feeling in the air that we still have the freedom to change things on a dime and to make quick decisions, and we don’t have a lot of bureaucracy.

WSJ: How, if at all, do you think your business will be affected by the new health-care law?

Ms. Webb: We recently started providing all of our employees with various options of health-care benefits and are following the new health- care laws very closely. It definitely is and will continue to have an impact on our business.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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