Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
by Sarah Brouillard
Most people bring little else than their shaggy manes to the barber’s. But at Dick’s Sports Barbers, customers over the years have brought their high school jerseys, autographed team portraits and snapshots of personal athletic achievements.
The tidal wave of sports memorabilia, covering nearly every inch of the 900-square-foot Edina shop, started innocently enough 14 years ago when owner Dick Kramer nailed to his wall a blown-up print of him and his son running the Twin Cities Marathon.
“Pretty soon a guy comes in and says, ‘Oh, I ran Grandma’s,’ ” says Kramer, referring to the annual marathon in Duluth. “ ‘I got a picture. My wife won’t let me hang it up at home. Can I bring it over?’ ” Shortly thereafter, local kids began dropping off their old high school uniforms before they headed off to college. The hammer used to affix the assorted mementos hasn’t cooled since.
Customers have always been front and center at Dick’s Sports Barbers. Not only are they reflected in the décor, but they’re the first thing on Kramer’s mind when he’s hiring barbers. Displaying so-called people skills is tantamount to any talent a prospective employee can demonstrate with a scissors, he says.
The shop is a “Cheers-like place, where everybody knows your name,” says Kramer, 57. “People walk in, typically they’re greeted by half the employees there. They feel like they belong.”
After his Edina shop hit what Kramer calls “a point of saturation,” he opened in April 2004 a second 2,700-square-foot shop in an Eden Prairie strip mall. He co-owns the new shop with his landlord, a real-estate businessman who did not wish to be identified. Kramer met him while scouting some of his properties for the expansion.
The silent partner has put up most of the cash for Kramer’s second shop, which is a separate company from the Edina shop. The two are considering adding several more locations in other high-growth suburbs such as Roseville and Maple Grove.
The Eden Prairie location has much in common with its older sibling. Each overflows with sports memorabilia, has nine barber chairs and nine barbers, and features sports video games and TVs perpetually tuned to ESPN.
“Everything that has worked for me before I just exaggerated a little bit because I had the space,” says Kramer. But while the original shop has generally catered to an older, predominantly male crowd — for years “I lived off old Republicans,” says Kramer — the newer one is positioned for a wider audience.
Young families are the main demographic Kramer is targeting. Kids in particular are drawn to the waiting room/video game center he built in the corner of the shop, called the “penalty box.” Not only does it entertain kids and keep them occupied when their parents are getting haircuts, but it’s also an incentive for them to visit a place they might otherwise try to avoid.
To sweeten the deal, on Wednesdays Kramer reduces his rates to $12.95 for preteen haircuts, which beats most chains’ average of $14. “I want to drive our awareness out into the neighborhood. I want moms talking about it.” Otherwise, a haircut at Dicks Sports Barbers costs $21, which Kramer admits is a bit pricier than many of his competitors.
The Edina shop has been enormously successful. Since Kramer bought it from an old neighborhood barber back in 1968, he’s seen revenue increase 10 percent year over year. In fiscal 2004 it had $900,000 in revenue, and made a small profit. Kramer had projected more than $1 million in sales by now for the shop, but like many other service businesses, it hasn’t quite gotten back its rhythm since the Sept. 11 attacks.
What most concerns Kramer is the lackluster sales and high expenses at the Eden Prairie shop, which will complete its first fiscal year in April. He’s losing, on average, $10,000 a month, not counting the $112,000 he spent on the build-out.
Breaking even in Eden Prairie would require Kramer to post $325,000 in gross sales a year, about 50 haircuts a day. Right now he’s only doing about 33 a day. Kramer believes once the shop gains momentum, the daily count could reach as high as 200. “That’ll happen out here, with these demographics,” he says.
Some in the industry say the new location, with its more mainstream appeal, isn’t really a barber shop at all. “That’s a beauty shop,” says Peggy Schmidt, owner of the Minnesota School of Barbering, Minneapolis, whose son worked for Kramer for five years.
Kramer may still offer the traditional cut and shave, hallmark services of the barber trade, but he’s also doing “fluff and buff” stuff, she says. “He’s looking for women and deep pockets. And God bless him, I hope he does very well.”
Kramer indeed has four cosmetologists on staff, who can do perms, colorings and chemical treatments. Most of them decided to get in to more of the men’s services after starting out at the fancy salons, he says. But bottom line, “we’re not trying to fill this shop up with ladies getting highlights.”
Locally, Kramer seems to have the “sports theme” niche all to himself — at least his version of it. Except for his son, who owns a similar shop in Woodbury, Minnesota barbers who market themselves with a sports theme tend to go the hunting and fishing route. A one-chair barber in Stillwater, says Kramer, has a basketball court floor in his shop. Some barbers simply hang up pictures that show off their hobbies.
Outside of the state, SportClips, a salon chain based in Georgetown, Texas, compares the closest with Dick’s Sports Barbers. The gimmick? To “create a championship haircut experience for men and boys in an exciting sports environment,” according to the company Web site. Stylists wear windpants, sneakers, and other athletic gear while patrons watch pro-sports games on TV. So far, the company has franchises in 24 states, including Iowa and Illinois.
Even if Dick’s Sports Barbers ever becomes a contender on the national level, Kramer himself will never stray too far from his own barber’s chair. When he doesn’t see a familiar face at his shop, he worries. That was the case when longtime customer Charlie Prescott didn’t come in for his usual haircut for a few months.
“Dick called with great fear that I had died or had an illness,” says Prescott, who is secretary and treasurer for Hopkins-based ABM Equipment & Supply, a truck equipment manufacturer and truck outfitter. The reason for the long absence wasn’t nearly as dramatic as Kramer had imagined: Prescott had merely gotten a few haircuts from his new daughter-in-law, a beautician.
If he’s not standing behind a barber’s chair cutting hair, Kramer can usually be found seated in a vacant chair next to a client, engrossed in a conversation he’s had on and off for 20 years. “How did that turn out with your wife? What’d the doctor have to say? Did your kid ever make it into that college he wanted to get into?” says Kramer, listing a few topics he’s recently touched on with patrons. “You follow up — it goes from one haircut to another.”
[contact] Dick Kramer, Dick’s Sports Barbers: 952.926.6924. Charlie Prescott, ABM Equipment & Supply: 952.938.5451. Peggy Schmidt, Minnesota School of Barbering: 612.722.1996; sc********@*ol.com.
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