Great Clips CEO: COVID-19 relief 'very important' to all small businesses

Steve Hockett, CEO of Great Clips, Inc., joins Yahoo Finance’s Kristin Myers to discuss why he signed a letter with other executives urging Congress to help small businesses amid the coronavirus pandemic.

Video Transcript

- Well, over 100 CEOs have asked Congress to help small businesses during this time of the coronavirus pandemic, and one of those is our next guest. We're joined now by Steve Hockett, CEO of Great Clips. Thanks so much for joining us, Steve.

STEVE HOCKETT: Good to be here.

- So I think it's a little bit unusual for us to hear of bigger companies looking out for the little guy. We almost always hear of a tension that exists between bigger companies and smaller ones. So talk us through exactly why it's so important that these small businesses are helped, at this time, through the coronavirus pandemic.

- Well, I'll answer based on Great Clips. We have 1,100 franchisees that operate close to 4,500 salons across the US and Canada. Each of those franchisees are small business owners in and of themselves. They operate salons in the communities where they live. They've got anywhere from one salon to a few dozen, but our average is six to eight salons after they've been in the business for a few years.

So they truly are small businesses that have been impacted-- mandated closures by state and local governments-- and so having them be able to get assistance and relief to work through as the economy rebuilds after COVID is very important, not just at Great Clips, but to all small businesses. But we're working hard on behalf of our franchisees.

- Right, and Great Clips has more than 4,400 hair salons throughout the US and Canada, so you are actually one of the world's largest hair salon brands. More specifically, for some of those franchise owners, as you were just describing them, small business owners, can you talk us through how they have been struggling over the last couple of months? Are some of those franchise owners gonna have to close up shop and are never able to reopen?

- Well, I'll give an example of what happened. On March 4, we had close to 4,500 salons open. On April 4, we had 17. And we've rebuilt, now, to where we have about 4,200 salons open. And so our whole system was mandated to shut down and to be closed, generally, everywhere except a few counties in Utah.

So that's been the biggest impact on our franchisees, is forced to close towards the end of April. They started to reopen and were just working to get customers to come back in and make sure that the customers are comfortable with our cleanliness, our safety. Hair salons, for decades, have been focused on cleanliness, sanitization, safety, and we're building off of that.

But frankly, it's been a struggle. COVID has not been easy on retail businesses.

- So to that point specifically, for your industry, it's something that is fairly intimate. It requires two people to get quite close to each other in order to have a haircut, so what precautions or what steps are you guys taking? I know you mentioned these measures around sanitation. What steps and measures are you guys taking, going forward-- one, to make sure that the customer is at ease with what's happening, but also, two, to make sure that your stores are not areas where the coronavirus can spread?

- Sure, and you're correct. The social distance in a haircut, by definition, is zero. And so, from day 1, we've been following the CDC guidelines in Canada, the public health agency of Canada local requirements. We've always done that. We've used our technology platform of online check-in and ReadyNext to text up, to keep people out of the salons. We've built off of the decades-long hair industry standards on cleanliness and sanitization.

And so we've got all of that. It's built and put together to welcome customers back, and we need to talk about that more and make sure that customers who are rightfully cautious understand that at Great Clips, and as have launched our GreatCare Promise, we are safe. It's a good place to come get your hair cut. Let's go out and get a haircut. Let's get back to some normalcy. And when you visit a Great Clips, we will take care of you, and you will walk out, but you will have felt safe, and you'll have observed all of the processes we're following while you're in the salon.

- Steve, I want to ask you quickly about that letter and just about your knowledge and expertise, obviously, as a CEO of a large company, but also your interaction with small business owners. We have no vaccine in sight as yet. How long do you think that some of these companies-- we're seeing some bigger companies filing for bankruptcy, mainly in the retail space. How much longer do you think businesses in the United States can hold on?

- Well, that's where we need the relief packages. I'm glad Congress is working on the next phase, the next generation of relief packages. The first few have been wonderful for businesses like ours and the franchisees', but the impact of COVID, frankly, has been staggering on all retail, on Great Clips, Inc. And so these relief packages, particularly for small businesses, are very important to keep them viable and to keep them going as a vaccine comes out, hopefully, over the next few months into next year, so that they're in place, so they can open up, so that all lives can get back to normal.

And that's why I signed on to the letter on behalf of our 1,100 franchisees-- because it's so important that we provide the platform where we can get back and rebuild all parts across the country, and we think the relief packages are a big part of that.

- All right. Steve Hockett, CEO of Great Clips. Thanks so much for joining us today.

STEVE HOCKETT: Thank you. Glad to be here.