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“At a certain age, every woman colors their hair,” said Amy Errett on this week’s Glossy Beauty Podcast. As the CEO and founder of the rapidly growing hair-color brand Madison Reed, she would know. Concretely, “every woman” means a market of about 90 million customers coloring their hair “on an average cadence of about seven weeks.”
Madison Reed first came to market as a DTC brand to be an at-home solution for color, but Errett could not stop before expanding to the salon market, too. The company announced last month that it would begin franchising in order to make its nearly 60 shades available to more consumers across the country.
“Our highest penetration just basically follows the U.S. population. Urban metros have the highest population, but we reach out to about a 150-mile radius around any of those cities and suburbs in a big way,” said Errett.
Errett joined beauty editor Priya Rao to talk about how she’s breaking the stigma around coloring at home, how she’s catering to a younger customer and what tough words of advice she would give to a competitor. Edited highlights below.
Hair salons are asking for disruption:
“We’ve taken out a ton of time. Classic salons are not very time-sensitive. They’re not really run like businesses. And [we are] less than half the cost. Also, most salons are buying product from a distributor, a wholesaler. We’re using the same product that we distribute ourselves, so our cost basis is really cost-effective, and our gross margins are super high. All of our products have a gross margin that’s about 78% or greater.”
Is Madison Reed for sale?
“I don’t know. I’m not a believer, having been at a VC. I just don’t believe in the ability for an entrepreneur to go into a business and say, ‘By this date, I’m going to sell it and I’m going to raise this much money,’ because you really don’t know what works and you don’t know what doesn’t work until you test, fail, iterate, succeed, scale. Certainly in the industry we’re in, I think we’ve broken out from the pack. And there are many acquirers. But we’ve done well in terms of capital, and so our obligation is to put our head down and now execute this next level of our strategy. The retention of our business is so compelling that we have a very predictable revenue stream.”
The responsibility of being a brand for women:
“I can tell any competitor that’s listening out there, ‘Good luck.’ It’s a hard category. You are talking about a woman’s appearance and emotion. And so one hallmark of this company has been, ‘What do our customers say and think about us?'” We need to continue to work hard at it, because it’s only about how great her hair looks.”