Rudy’s Barbershops, an E Pine-headquartered exporter of Pike/Pine cool to the nation, has a new majority owner in the shape of a New York-based venture capital and buyout specialist. But like many changes on Capitol Hill, the impact of the $9.25 million investment in the indie-minded barbershop style chain is a matter of perspective.
“This is investment in slow growth,” said company CEO Vy Le, who joined Rudy’s four years ago and who remains at the helm through the investment by Syosset, New York-based Northwood Ventures. “A lot of that money is going into existing assets. Simple things like new chairs on Pine,” Le said.
The CEO tells CHS that the purchase of majority control of Rudy’s will mean upgrades at its 15 existing shops and expansion in its existing markets. The Seattle area will see an expanded Bellevue Rudy’s this summer and a long-anticipated West Seattle shop is in the offing. In addition to expansion in existing markets like New York, Portland, and Los Angeles, Le said there will likely be one new market added to the Rudy’s hip haircut empire. The investors are reportedly readying Rudy’s for a three-fold expansion of stores “over the next several years.”
Le said the recapitalization represents yet another new stage in a company that has grown into one of the accidental empires of Alex Calderwood, David Petersen and Wade Weigel. We wrote about the early ’90s, bootstrap-style start of Rudy’s and the Ace Hotels chain late last year after the death of style icon Calderwood. Le said the plan to bring in the involvement of an investor like Northwood Ventures was in the works before Calderwood’s death as the founders’ businesses began efforts to upgrade operations, improve benefits, and shift to the new reality of operations with hundreds of employees.
Le said the style of the business put in place by the founders remains as the company’s lifeblood and that each “defined success in different way.”
“The great thing is we’re really modest bout the success of the business,” Le said. “It comes down to people.” Le said Petersen, Weigel and the estate of Alex Calderwood remain as small shareholders in Rudy’s.
The company now employs more than 400 people.
Included in those 400 are the company’s stylists who work on commission, a standard in the industry. While the company applauds “everything” about Seattle’s movement toward a $15 minimum wage, Le said the changes will be a concern for Rudy’s. She said the company is “waiting to see” how things play out before making decisions. “A price increase is always the last route,” Le said of the way Rudy’s likes to operate. Efficiencies like the company’s point of sale system and in the way the company operates across different states and municipalities also offer ways for Rudy’s to roll with the changing business environment in Seattle.
The $9.25 million acquisition has its seed in New York City where Rudy’s expanded in 2012, Le said. “We are on this surge of growth after opening in New York,” Le said “After being in the business for 20 years, the guys wanted to take it to the next level.”
Le said despite the changes, the investment, and the changing neighborhood, Rudy’s will continue to make the offices above its E Pine shop its global headquarters.
“It’s the heart and soul of the brand,” Le said.