Local Phenix Salon Suites cutting into national market

Gina and Jason Rivera have married their salon experience and business savvy to grow a national salon and real estate concept. They plan to open 35 locations by the end of the year.

Owners expect to add 35 shops this year

Nine months ago, Jason and Gina Rivera owned three Phenix Salon Suites locations in Colorado Springs, but during this short period they’ve grown to operate a total of 15 locations across the country, including three they opened in California last weekend.

And, that’s just the beginning.

They expect to be operating up to 50 locations by the end of the year, and then jump into the international marketplace.

The company’s vice president of real estate acquisitions, Robert Aertker, spent a couple days in Florida last week and found spots for several potential new stores there, he said.

“It’s such a good concept,” Aertker said.

That concept involves leasing large office buildings or retail storefronts, splitting them into smaller suites and renting the suites out to salon professionals who want to own and run their own businesses without all the “salon drama,” Jason said.

“It’s really a salon concept with a real estate twist,” he said.

Because the suites are renting to established salon professionals used to paying high booth rental fees or large commissions on their earnings in traditional salons, Phenix can charge enough to turn a solid profit on the real estate while still offering a good deal and more freedom to tenants than they have had in other settings.

Gina, a hairdresser, comes from a family of hairdressers. Her father, Larry Peneschi, owned a salon and has more than 75 years of experience in the business. Including Gina, there are more than 25 salon professionals in the family.

“It’s a really good marriage,” Jason said. “Not just our marriage but the marriage of her experience in salons and my business background.”

Jason earned his business and marketing degree while training in the Springs with the U.S. Olympic Judo team. He later started a marketing company and then sold it in 2007.

That’s when the couple opened their first Phenix Salon Suites.

Because Phenix, named for Gina and Jason’s first son, has deep ties to the salon industry and had plenty of input from Gina and her family to get off the ground, it’s engineered in a way that makes it particularly attractive to tenants, Jason said.

“We have competition,” he said.

Some competitors include Salon Suites Your Day Spa, In Style Luxury Salon Suites and Salon Spa Suites.

“But most of it is real estate-based and you can tell,” Jason said. “We don’t have to be the first or necessarily the fastest. Look at MySpace and Facebook. We just have to be the best.”

And he said he believes Phenix is accomplishing that by focusing on what salon owners need. The business provides vendor connections so tenants can get deals on products and supplies the way they would in a traditional salon, but with more choice about what they buy.

Jason and Gina are also planning to offer free continuing education courses for tenants, starting with classes at the Colorado Springs locations in June and July.

Robert Edick, who owns and operates a Hair Construction salon with his wife in two Colorado Springs Phenix locations at Vickers Road and Academy Boulevard and downtown, is the company’s new vice present of education.

He is bringing a Hair Construction education program popular in Europe to the stylists who work at Phenix, he said. It will be completely free to tenants and as realistic as possible.

“We want to give them haircuts they can use on their next client,” he said.

Phenix has given Edick and his wife the opportunity to grow their business and the flexibility to come and go as they please.

The couple share time at their booth and take turns working every other day, and Edick found another business partner to split a second booth downtown as well and was able, after years in the business, to expand to a second location.

That expansion has increased his income potential, he said.

But his favorite thing about his suites is that he can lock the door and walk away when he doesn’t have a client.

“When I leave here, I can go to yoga, I can go to the store,” he said. “I don’t have to stay here with no clients and nothing to do.”

That freedom is at the heart of the Phenix concept, Jason said. That’s why the business model is successful and why Phenix has seen such growth.

The idea came from Gina’s experience in the industry.

“Even when you were renting a booth as an independent contractor, you still felt like you worked for someone else,” she said.

When the Riveras opened the first Phenix Salon in 2007 it filled up immediately and there was a waiting list with 20 names on it within a few months. That’s when they decided to open the second location.

“This location gave 37 people the opportunity to own their own businesses,” Jason said.

One of those people was Jason Kraft, who opened his Sunless Perfection Airbrush Tanning Salon in March of 2010. He did it because a friend in Denver was having success with it and he didn’t know of anything like it in Colorado Springs.

He started with one suite at the location on Vickers and Academy.

“This was great for a startup like me,” he said. “I probably wouldn’t have been able to make it if I had all the overhead of a whole retail location.”

The other women in the building started using his airbrush tanning and he got about 30 clients through the door a week, Kraft said.

“It paid the rent,” he said.

And it covered the cost of his female employee, who applied the tanning spray to customers.

Now he does as much business in a day as he did in a week at the beginning and has expanded to two suites at the Vickers location and recently opened a new location downtown.

That wouldn’t have happened if he’d had to find a full retail storefront.

Utilities are included. He can decorate however he wants. But it’s a small space so he didn’t have to spend a lot to furnish it. He pays his rent weekly and can leave any time with 30 days notice. That low commitment was exactly what he wanted when he got started.

In addition to rapidly growing the business, which the Riveras are going through corporate purchases, franchising and some corporate holdings with investors, they’re branching out into new realms.

They will purchase their building at Vickers and Academy in 2013. It will be the first property Phenix owns, Jason said. And the company will be looking at getting into real estate investing more, he said.

They’re also going to launch a Phenix Salons product line that they will sell direct to the consumer through infomercials and at their locations.

Gina and her family were intimately involved in the creation of the product line and had a say in everything from what ingredients to use to which scents to add. It’s a scientifically developed product that the Riveras helped create from scratch, not a private label.

After the product line launches, Jason said there is another salon concept the family expects to launch. The Priest James Salons would be named for the couple’s youngest son. Jason said he wasn’t ready to reveal the concept behind that brand yet.

He’s also looking at expanding internationally and has spoken with governing agencies in Japan and Canada.

“We’d like to position ourselves for an initial public offering,” Jason said. “That way we can raise some capital to pursue these other growth opportunities.”