Vienna, Virginia-based Creative Hairdressers Inc., whose salons include Hair Cuttery, Bubbles and Salon Cielo, has filed for Chapter 11 bankruptcy and is selling off substantial assets, including the majority of its salon locations, to HC Salon Holdings Inc.
The investment by HC Salon, an affiliate of Tacit Salon Holdings LLC, will allow Creative Hairdressers to continue paying its thousands of employees and reopen its salon locations, shuttered by the coronavirus pandemic, when allowed to do so.
The investment also allows Creative Hairdressers to significantly reduce its debt obligations, it said in a statement.
“These have been unprecedented and trying times for everyone,, and especially in our industry. Our new financial partners are excited about the long-term potential in our industry and our ability to rebound post-crisis,” said Phil Horvath, president of Creative Hairdressers
The company says the Chapter 11 filing will not have a meaningful impact on its day-to-day business once its salons are able to re-open.
The sale of its assets to HC Salon is expected to close within 45 days.
Creative Hairdressers, founded in 1974 by The Ratner Companies, has more than 750 salons nationwide.
Hair care is a $47 billion a year industry in the U.S. Salons and barbershops across the country have been closed since March when coronavirus restrictions hit business operations nationwide.