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Nail Salon For Sale Can’t Miss Report

Nail Salons 1
Written By: Marketdata LLC
Last Updated: October 7, 2021

Nalon Salon For Sale Deep Dive

 The United States nail salon industry was an $8 billion business in 2019 before the pandemic hit, contracting by nearly 20% in value last year. Actually, when considering the revenues of non-employer establishments without payrolls, the true value of the industry was $17.3 billion.

The industry is poised for recovery, with 2021 revenues expected to grow by 18%, as nail salons reopen and nearly return to 2019 levels of business.

There were approximately 28,000 brick & mortar retail nail salons in the nation as of 2019. Nail salons are also called nail shops and nail spas

The “average” nail salon is estimated to have annual revenues of $287,000, but these facilities can gross as much as $575,000, and revenues are likely conservative, given that a significant share of receipts are via cash payments that go unreported. These nail salons have a net profit margin of about 17%.

The industry is populated by small “mom & pop” nail salons with one retail store, but there are approximately 980 nail salon franchise locations in the U.S.

Marketdata has been able to identify approximately 989 sites or locations that are related to one of ten franchisors, or 3.5% of the estimated 27,963 facilities in business as of 2019.

Top Nail Salon Franchises

Franchise CompanyNumber of UnitsEstd. Systemwide Sales ($ mill.)
Regal Nails687$ 296
Davi Nails445$ 127
Camile Albane269#$ 77
Frenchie’s25$ 7.2
PROSE Nails20$ 5.7
Nail Garden14$ 4.0
Miniluxe14$ 4.0
Bellacures Nail Salon8$ 2.3
Namaste Nail Sanctuary7$ 2.0
Hammer & Nails GroomingNA
Total: 989

# International total

Source: Marketdata research, Franchise magazines and websites, published sources, company websites

Nail Shop Industry Stats

Nail salons are given the NAICS code 812113 by the U.S. Census Bureau, which comprises “establishments engaged in providing nail care services, such as manicures, pedicures, and nail extensions.”

Nail shops come in a variety of sizes and types, ranging from large, upscale full-service salons where appointments are encouraged, to busy walk-in salons with rows of technicians. They include specialty salons that focus on particular types of nail services, such as “green” services, men’s services, nail art, or artificial nails.

Many nail salons stick to the basic services, such as manicures, pedicures, polish changes, acrylics, wraps, and basic nail art. Some salons will employ one or two nail techs or manicurists while some may employ several. Many salons combine retail sales of nail and other beauty-related products with nail services to increase income and provide products their customers use.

Still other salons provide additional services beyond nail services. These services most often include traditional spa services, such as waxing, facials, and massage. Some even include more unusual services like ear piercing, microdermabrasion, tanning, and permanent makeup.

Nail Salons

Nail Salon For Sale Challenges

“Because it is predominantly an Asian women sector, you have these racialized and gendered stereotypes of Asian women with small, nimble hands,” she said. “As well as the stereotypes of these are sweatshops and it’s dirty and cheap and low-wage.” 

Ironically, Asian immigrant salon workers were the ones that democratized the nail salon industry in the 1980s. They changed nail salons from luxury spas to discount walk-in businesses, making nail treatments accessible to millions of American women.

But making this popular service affordable came at the cost of their own health and financial security. Census data reveals an estimated 80% of nail salon workers are low-wage earners, which is more than double the national rate of 33%. 

The nail industry’s workforce is roughly 81% female and 79% foreign-born. Further, the report shows that 74% of foreign-born workers are from Vietnam.

Health and safety have also long been an issue in nail salons, but they’re even more pronounced amid the spread of the coronavirus. Research shows that nail salon workers face a higher risk of cancer, pregnancy complications and respiratory issues. 

In February 2020, 80 percent of nail salon workers stated that they had experienced wage theft in the industry. Many workers are also exposed to workplace hazards like toxic dust and fumes that can cause cancer, respiratory issues, skin damage, impact fertility and fetal development and other issues.

Based on a February 2021 survey of 645 nail salon workers, 29% said they had tested positive for COVID and an additional 9% said that they believe they had the virus but were unable to get a test. Compared to positivity rates for the general U.S. population, (the New York Times reported that about 7.6% of the U.S. population had tested positive for COVID by February 2021), rates for nail salon workers are much higher.

A survey of more than 1,000 nail salon workers in the spring and summer of 2020 revealed that 80% of workers did not qualify for aid from the government, such as Unemployment Insurance or the 2020 federal stimulus checks, due to immigration status.

Effects of the Pandemic

 The Covid-19 pandemic devastated many personal care industries that rely on the face to face delivery of their services. Nail salons were no exception. It can’t be done virtually. It has been a huge challenge, just trying to reopen and following all CDC guidelines. Last year, salons could only have one customer at a time, and this was difficult for customers to understand and accept.

Many nail salon owners said business had fallen to 40-50% of what it was before the pandemic hit. In order to follow health protocols, they’ve had to cut back on staff, reduce their number of clients and spend more on expensive protective gear.  As a result, nail salon technicians and owners are part of groups that have been the most financially hard-hit by the pandemic. Job losses have disproportionately affected women of color, especially low-wage workers like nail salon technicians.

The cost of expensive protective equipment like table and face shields and cleaning supplies have added to the burden of reopening. CDC guidelines require nail salons to disinfect all high-touch surfaces and to use fresh disposable gloves and smocks after every customer.

These increased costs and a continued drop in profits have business owners knowing that they have a tough road ahead. These worries have led salon owners to spend a significant portion of their time applying for COVID-19-related bank and federal loans.

Unfortunately, for some Vietnamese workers and owners in the nail salon industry, language and information barriers can limit their access to financial support. Fortunately, the Vietnamese community is close-knit with a strong network for communication, which has helped to navigate the pandemic. 

In some salons, none of their nail techs have been willing to come back to work due to health and safety concerns. It has meant the death of these mom-and-pop businesses.

One result of the pandemic is that nail brands are reporting soaring product sales that reveal an increased interest in doing one’s own nails at home. Technicians with loyal customers and reliable transportation are offering house calls in droves. Some clients were willing to pay the house call price. Nail techs had a minimum of $75, and they may take only one client every other day.

Nail Salon

Nail Salon For Sale Opportunities

There appears to be some disagreement over the number of physical nail salons that operate in the United States. Nails Magazine research over the past several years shows that in 2016 there were 69,738 nail salons, but this number is suspect. The magazine today reports that its staff from 2016 is gone and they could not provide clarity on just how this estimate was derived.

Census data finds that there were 24,931 nail salons in operation in 2017. This may be somewhat conservative, taking into account that not all establishments are incorporated. However, this is a major difference from the 69,738 figure by Nails Magazine.

The Census Survey, Marketdata believes, is one of the most accurate and reliable information sources around. It’s also the most comprehensive, with a sample much larger than trade associations or magazines using member or subscriber lists. In addition, these businesses are required by law to fill out the survey. As such, we believe it is the superior source for accurate industry data.

There is another reason why we believe that the Nails Magazine figure of 69,738 nail salons is not accurate. The Census Bureau reported that industry receipts in 2017 were $6.23 billion. If there were 69,738 nail salons operating at that time, then the average yearly receipts per facility would have been only $89,463. This doesn’t make sense. At that level of gross revenues, with an owner and several nail techs and a receptionist, it would not be worth it to be in business.

In fact, The Census Bureau survey in 2017 reported average annual receipts per nail salon of $250,254, which makes more sense. And, the 2019 payroll data from the County Business Patterns survey show that receipts in 2019 were estimated at $8.04 billion, with 27,963 facilities operating. This comes out to $287,519 per nail salon. This figure also makes more sense, and is far higher than $89,463.

Therefore, we can only conclude that the 2016 Nails Magazine figure of 69,738 salons was far too high and is not accurate.

Another survey, within the scope of the Census Bureau, is County Business Patterns (CBP), which is an annual survey that tracks payrolls. The latest data from CBP is from 2019.

Number & Receipts of U.S. Nail Salons: Employers with Payrolls

YearNo. of EstablishmentsAnnual Receipts ($ millions)Annual Percent Chg.
20078,082$ 1,325 
200812,011$ 1,59320.2
200912,673$ 1,7258.3
201013,712$ 1,96914.1
201114,771$ 2,39921.8
201216,045$ 2,98924.6
201317,180$ 3,39313.5
201418,604$ 3,83413.0
201520,003$ 4,41515.1
201621,623$ 5,03214.0
201724,931$ 6,23924.0
201927,963$ 8,040 E28.9 (2 yrs.)
    
2020 Est. $ 6,512-19.0
2021 Fore. $ 7,70818.4

Source: U.S. Census Bureau, County Business Patterns, Service Annual Survey, Marketdata estimates and forecasts

The Census and CPB surveys reveal that there were approximately 28,000 nail salons operating in the nation in 2019, and the dollar size of the industry is about $8 billion. It also shows that the industry has grown rapidly since 2007, more than tripling in size.

The 27,963 nail salons operating in 2019 are establishments with a payroll. There are undoubtedly other “non-employer” operations as well (see table below).

Number & Receipts of U.S. Nail Salons: Non-Employers without Payrolls

YearNo. of EstablishmentsAnnual Receipts ($ millions)Annual Percent Chg.
2007152,597$ 4,287,992 
2008161,886$ 4,512,9475.2
2009170,311$ 4,465,248-1.1
2010183,093$ 4,934,35810.5
2011193,059$ 5,372,2478.9
2012198,562$ 5,773,3207.5
2013212,066$ 6,199,2337.4
2014221,537$ 6,679,7627.8
2015228,473$ 7,106,5586.4
2016234,204$ 7,589,0666.8
2017241,381$ 8,174,8027.7
2018262,270$ 9,158,49912.0
2019NA$ 9,321,0001.8
2020 Est.NA$ 7,550,000-19.0
2021 Fore.NA$ 8,939,00018.4

2020 Performance: Effects of The Pandemic

These figures above were for 2019, before the pandemic hit. There is no doubt that this industry was hit hard, with the closure of many salons and months-long shut-downs that took place in California and elsewhere.

Many nail salons were closed during March to June. When salons opened up again, there were customers who refused to wear masks, became irate at waiting their turn in reduced-capacity facilities, or who denied the existence of the virus altogether. During the spring and summer of 2020, salons nationwide changed their operating procedures or closed altogether to accommodate mandates in their region. 

It didn’t help that in May 2020, California governor Gavin Newsom caused an outcry when he alleged that California’s first community spread of COVID-19 occurred in a nail salon, a statement that was later proven to be inaccurate. 

How many salons are now operating in 2021 is not known, and is very difficult to estimate. Personnel at Nails Magazine estimate that 50% of independent nail technicians today operate in “suites”, meaning that they rent space in salons, and don’t run a physical salon. Some techs are doing nails at home. And, many states don’t require a license to operate.

The industry has been turned on its head. Many salon workers are still out of work, either because their salons have closed, they no longer have childcare, or don’t feel safe returning to work.

When nail salons closed across the country, some owners looked to alternate business models to stay afloat. Studios shifted gears to e-commerce, selling branded polish, manicure kits, or even virtual classes. Some nail techs sold their own hand-painted press-on nails throughout the studio closure, or survived on stimulus checks, and generous tips from their regulars. Others started GoFundMe campaigns to help pay employees and keep up with rent.

Nail Salon

Looking at recent payroll data from the Bureau of Labor Statistics, we can get an idea of what nail salon payrolls were doing in 2020. The BLS reports that total annual wages for this industry were valued at $1.92 billion.

Based on the ratio of payroll to sales (29.5%), Marketdata analysts estimate that receipts for nail salons last year were $6.51 billion. Receipts were $8.04 billion in 2019, so this means that receipts fell by 19% during 2020, due to the pandemic and business closures.

This estimate is further corroborated by data from the 2021 Financial Disclosure Document filed by Regal Nails & Salons, the nation’s largest nail salons franchise organization. It reported that parent company revenues from royalties and franchise fees fell by 21% in 2020 from 2019.

 

2021 Industry Outlook

As the Covid-19 vaccines started to become available this year, more businesses have re-opened and the economy has improved. However, the recovery has been slow, and many businesses are still not operating at full capacity, especially ones that rely on in-person services indoors.

According to the BLS, total wages for the first quarter of 2021 for nail salons was valued at $568.5 million. Extrapolating this to a full year, payrolls should be worth $2.27 billion or more.

Based on the ratio of payroll to sales (29.5%), Marketdata analysts estimate that receipts for nail salons will reach $7.7 billion in 2021 (employer establishments). This would be nearly 96% of the 2019 pre-pandemic level. It would also represent an 18.4% gain over 2020.

  

Following are data regarding recent nail salon industry employment (BLS):

2020 annual average:   94,629  paid employees

January 2021               97,646

February 2021            112,884

March 2021                117,774

One can clearly see that the industry is recovering.

 

Key Economic Ratios

Every five years, the U.S. Census Bureau performs a survey of economic activity. Every industry is assigned a NAICS code (North American Industrial Classification System), which s used to track a variety of economic measures, nationally, by state, by county and by city (value of shipments or receipts, payroll, number of employees, number of establishments and firms, etc.). The last Census was performed in 2017, preceded by ones in 2012, 2007, 2002, etc.

Nail salons are given the NAICS code 812113, which comprises establishments engaged in providing nail care services, such as manicures, pedicures, and nail extensions. NAICS codes can be 2-digit, 3-digit, 4-digit, 5-digit and 6-digit codes. The 2-digit code is the general category “other services”. Code 8121 is for “personal care services”, and 812113 is for nail salons.

Number of U.S. Nail Shops

 The U.S. nail salons industry in 2017 was comprised of 24,931 facilities with payrolls, up more than 43% from 2012. It employed 102,000 workers.

More than two-thirds of nail salons have fewer than 5 employees, and a quarter have between 5 and 9 employees. This higher volume of small-scale salon operations shows that the nail salon industry is dominated by mom-and-pop salons. However, this data is limited to employees only, so the salons may have more workers who are independent contractors.

92% of nail salons have less than 10 employees.

24% have 5-9 employees.

Nail Salons

Receipts Per Facility

 The average nail salon had annual revenues of $250,254 in 2017. In 2019, this figure rose to $287,519, based on more current data from the County Business Patterns survey. Revenues per nail salon grew at a 9.0% average annual pace from 2012 to 2017.

Average Receipts, Payroll, and Number of Employees per Establishment: 2007, 2012, 2017

YearAverage Receipts per Establishment% ChangeAverage Payroll per Establishment% ChangeNumber of Employees per Establishment
2007$ 163,989$ 48,5563.51
2012$ 172,3575.1$ 49,9412.93.37
2017$ 250,25445.2$ 73,94248.14.10

Source: U.S. Bureau of the Census, Marketdata calculations

Market Share – Industry Concentration

The nail salons industry is very competitive. The 50 largest companies in the industry as a group only captured 2.5% of receipts in 2017. There are very few operations or companies with more than one nail salon. The industry was actually less concentrated in 2017 than it was in 2012 (when the top 50 captured 3.5% of sales).

 

Note:

The complete Marketdata 20-page report contains a Reference Directory of industry trade associations, magazines and other reports, as well as franchise company profiles and average earnings, industry P&L/Income Statement, 2025 Forecasts, and more.

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