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Bain Medium Profitability M&A Entrepreneurship

A Hairy Ordeal

#Retail #Beauty #Services
ProHub Comment

This case requires candidates to build a financial model comparing two business scenarios: Megan's current independent practice versus acquiring Salon Deluxe. The key analytical challenge is recognizing that Salon Deluxe operates at full capacity with pent-up demand, creating an opportunity to increase NPV through operational improvements like utilizing unused space.

Estimated Time 15 minutes
Difficulty Medium
Source Darden
50 / 100
Your friend Megan Black calls you to ask for your advice. Megan had been working in the beauty industry as an independent hair stylist for 2 years when the owner of Salon Deluxe approached her and asked her to buy the salon. It has always been her dream to own a hair salon, but she isn’t sure if she should do it, or focus on her current business, Megan Black Balayage (MBB). She wants your help to figure out what she should do.

Clarifying Information

  1. What is balayage? Balayage is a technique that “paints” the hair to achieve a more natural looking hair dye experience.
  2. What Is Salon Deluxe’s business model? The salon is a high-end hair salon that specializes in balayage. The business has two segments, services and products. Appointments are booked centrally, through the salon’s booking portal, and clients see 1 of 4 contractor employee stylists.
  3. What does a balayage appointment consist of? A balayage appointment has 3 parts: hair & product prep (10 mins), hair painting (90 minutes), drying & styling (50 minutes)
  4. Does Megan have specific metrics or goals related to this project? Her goal is primarily to evaluate which business has the greatest NPV.