Too Close For Comfort

Is it bad for business when too many beauty retailers occupy the same area?
by Kendall Septon
istockphoto.com

In a diverse suburban community just a stone's throw west of Chicago, general manager of K-Stone Beauty Supply Joe Seok has helped run his family’s ethnic beauty supply and wig emporium in the heart of the Village of Oak Park’s bustling commercial district for more than 20 years.

Dotted with a variety of businesses—from car-repair shops to restaurants to salons—the community prides itself in its diversity of businesses along the near two-mile stretch of Madison Street where Seok runs K-Stone Beauty Supply. His store is one of two beauty supplies selling nearly identical goods along the street, but Seok maintains that the businesses have forged a competitive, yet friendly atmosphere during the past decade.

Like many small business owners, Seok recounts a familiar tale as he explains how he has seen his store through its fair share of uncertain times—especially in the face of a dismal economy during recent years. His advantage, he says, has been K-Stone Beauty Supply’s long-standing reputation for offering a friendly shopping experience and top-notch customer service. Recently though, he says he’s concerned even that may not be enough to keep his business afloat.

Last fall, Seok watched as a third beauty supply opened its doors down the street from K-Stone. Soon after, he became aware of yet another store’s intention to follow suit—this time, with plans to open less than a block away from his location.

Seok acted fast. With the knowledge that Oak Park already had a zoning ordinance in place forbidding other similar businesses—such as barbershops, hair-braiding establishments/hairdressers—from opening within 500 feet of each other to avoid oversaturation along the east-west stretch of Madison, he submitted his own request to city officials asking them to consider applying the same restrictions to beauty supplies.

“There’s no variety when there are seven retail stores [in the same area] and three within 300 feet [of each other that all] sell the same beauty supplies,” says Seok. “Everyone thinks this was just an issue of me trying to keep a fellow competitor out, but it wasn’t. I would be lying if I said I was happy about another store moving in, but really, my motivation was about keeping some variety.”

But in mid January, following several months of debate, the city’s governing board sided with the planning commission’s recommendation, denying Seok’s proposal. Their reasoning was that promoting a free market would create healthier competition in the business community, plus give a boost to the city’s sales-tax base.

[Image: iStockphoto.com ]

Too Close For Comfort, p.2

“A lot of the strategy in retail is putting like-businesses together,” said Ray Johnson, a board trustee, during the decisive Jan. 18 meeting. “Why we would want to restrict that, I don’t know.”

Seok acknowledged that the approach may ring true for many businesses, but for a niche beauty supply such as K-Stone—which specializes in the African-American hair market—differentiating a shop from its competitors can prove nearly impossible.

“From the city’s perspective, this is a McDonald’s to Taco Bell argument, where customers can frequent businesses that may be similar but still walk away with something different,” says Seok. “But in reality, this is a McDonald’s-to-McDonald’s type argument because about 99% of ethnic beauty stores, like mine, all sell the same exact stuff. Like any industry, there are only so many of the same businesses you can cram into an area before the boom goes bust.”

Neighboring business owners along Madison Street, however, came down on both sides of the argument.

“I can really understand where Joe is coming from, but at the same time, the city was right to say you can’t sit and corner the market,” says Frank Cox, who has owned and operated Frank’s Barbershop on the street for 11 years. “Personally, even if the zoning restriction [weren’t] in place, I wouldn’t be worried if another barbershop opened up next to me because the service we offer is at another level, so we can stay competitive. For any kind of business to survive, you’ve got to figure out a way to keep your customers choosing you.”

A couple of stores away from K-Stone, the owner of another longtime Madison establishment, Laury’s Bakery & Cake, empathized with Seok’s predicament.

“There are only so many businesses of one type a street like this can sustain,” says Jerome Ketzback, who has run his business from the commercial district for more than 28 years. “Yes, there are a lot of different restaurants along Madison, but that’s completely different. “A beauty supply is a beauty supply, and realistically, if they put another one in, someone’s going to lose somewhere down the line.”

Other beauty supplies in and around the commercial district refused to offer an opinion or could not be reached for comment.

In hindsight, Seok and Ketzback said they weren’t shocked that the zoning request was turned down; instead, attributing Seok’s case to be just the latest example of a string of bad business decisions Oak Park governing boards have made concerning the Madison Street district.

Too Close For Comfort, p.3

thinkstock.com/Hemera collection

“In a way, I saw this coming,” says Seok. “They (the city) allowed the same sort of proliferation to happen a few years ago with a number of car dealerships that have almost all gone out of business since then and left a bunch of vacant lots. You’d think they would begin to learn from past mistakes, but I guess that didn’t turn out to be true this time.”

Oak Park’s city planner, Craig Failor, attributes the failure of Madison’s auto dealerships to several other factors.

“Madison Street was auto row. It was the place you came to buy a car,” says Failor. “The number of dealers on the street were not detrimental to one another. They fed off each other because each offered a variety of makes and models, allowing [shoppers to] cruise the strip looking for the right car. The downfall of the car industry on Madison was not proliferation; it came down to factors like economics, car prices, land prices, limited space and close proximity to residential areas.”

Failor argues that officials have always acted quickly to stop the oversaturation of similar businesses.

“In the past, we [have had] to limit beauty salons to 500 feet apart on Madison Street, but that decision was never due to a salon owner seeking the restriction,” he adds. “In fact, as far as I can recall, there has never been a similar request by any other business attempting to restrict competition.”

A zoning petition like Seok’s—even in the beauty-supply industry—is a rare occurrence, says Brad Masterson, communications manager with the Professional Beauty Association.

“Honestly, this is the first time I’ve heard of something like this happening,” says Masterson. Without knowing the breadth of the situation, however, he declined to offer a formal opinion of the association on the issue.

Masterson did have one piece of advice to offer Seok, however, as well as others in the industry who may be struggling to stay competitive—focus on education.

“Every business should be offering excellent customer service and an exclusive line of products; but a key service component many independent owners forget about is to educate customers about their products,” states Masterson. “If you’re working to provide extra education to the beauty professionals and others in your community on how to use a product or address beauty trends in your area, you’ll have a better chance at distinguishing yourself from the rest in our industry.”

Looking forward, Seok says—albeit reluctantly—that he has no plans of dwelling on a decision he can’t change. “I can’t even begin to speculate on how this will affect us; it could either bring us a lot more business or it could ruin us,” says Seok as he laughs nervously. “Like any other competing businesses out there, let the pricing war begin.”

Kendall Septon is a freelance writer based in Denver.

[Image: thinkstock.com/Hemera collection]