1.It’s pretty dire straits for a lot of businesses these days, but hair salons in Japan seem to be especially feeling the heat. Last year saw the highest-ever number of salons filing for bankruptcy at 235, breaking the record set in 2024 with 215 bankrupt hair stylists.
2.This also had an effect on the average lifespan of salons, which could expect to survive for 13 years in 2025, down from 14.1 years in 2024. Also, of the currently active salons, 49 percent are less than 10 years old.
3.This is all worse than even during the COVID pandemic, partially because such businesses were supported through that period by various subsidies and zero-interest loans. Then, annual bankruptcies actually hit a record low in 2021, with only 68.
・Do you have a favorite hair salon that you go to regularly? What was the primary reason you chose it originally? (e.g., staff skill, price, interior/facilities, or location?) Are you considering trying a new salon anytime soon?
4.The current situation more closely resembles what took place during the 2008 global financial crisis, except that the reasons behind it are different. Prior to 2008, hair salons were considered rather stable businesses, since most people always need haircuts.
5.However, during the crisis, people began searching for ways to cut costs as much as possible. Around the same time, discount hair cutters like QB House hit the scene, causing widespread disruption to the market, and making it hard for established salons to maintain with their relatively high prices. As a result, bankruptcies climbed above 100.
6.Now, with inflation and a looming oil crisis, people are once again seeking out cheaper ways to live their daily lives, mimicking what happened in 2008. However, this time the price squeeze is exacerbated by just about everything rising in cost, from electricity to hair products, making it virtually impossible to lower prices to meet customer needs.
・When low-cost chains like QB House disrupt the market, how should traditional salons compete? Is it better to lower profit margins to match cheap prices, or focus strictly on high-end luxury services?
・In your own industry or daily life, have you seen a similar low-cost competitor change the market? How did traditional businesses react?
7.To make matters much worse, many salons can’t even find enough staff to operate. Stylists are often drawn to the wages and security of large chains and salons with strong reputations, leaving small to mid-sized ones little to work with.
8.These smaller businesses tend to recruit straight out of beauty school, but many of those new grads have dreams of opening their own salons and end up leaving shortly after being hired. Readers of the news all seem to agree that the real driving force behind the bankruptcies is an oversaturation of the market.
9.Despite the record bankruptcies, it still doesn’t put a dent in the roughly 250,000 salons operating nationwide. As for traffic lights, Japan still has a lot, but they fall short of hair salons, with only 210,000 installed. And although convenience stores may seem to be everywhere, that’s more to do with strategic locations because Japan only has about 55,000 of those.
・Small and mid-sized salons are struggling to find and keep staff because stylists prefer large chains or leave early to start their own businesses. As a manager, what can you do to attract young talent and make them stay long-term?
・Japan has 250,000 hair salons—more than traffic lights or convenience stores. In this hyper-saturated market, if you were a salon owner, how would you manage your location, services, and pricing to succeed?