With plans to emerge after the coronavirus crisis, the owner of salon chains Hair Cuttery, Bubbles and Salon Cielo has filed for Chapter 11 bankruptcy in Maryland in order to reorganize and sell the business.
The parent company Creative Hairdressers Inc., which operates 750 hair salons, reached a deal to sell its assets to HC Salon Holdings LLC, an affiliate of Tacit Salons Holdings LLC. Tacit has agreed to provide debtor-in-possession financing to allow the company to continue operating throughout the bankruptcy process.
“These have been unprecedented and trying times for everyone, and especially for our industry,” said Phil Horvath, president of Creative Hairdressers, who said the company is looking forward to reopening its doors in the future.
The company expects the sale to go through within the next 45 days.
Azhar Quader, chairman of Tacit, said he expects the salon business to emerge from the COVID-19 pandemic “in a stronger financial position.” Tacit was formed as an investment platform to buy salons — that market is notoriously fragmented.
“We’re focused on saving jobs for salon professionals and building a strong, financially healthy company,” he added.
Creative Hairdressers is not the only beauty services business that has had to file for bankruptcy protection as COVID-19 rendered nonessential businesses closed — Mynd, formerly Elizabeth Arden Red Door Spa, filed for Chapter 7 in March.
While salons in most states remain closed due to COVID-19, salons in Georgia have started to open, despite safety concerns from some owners.
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