From January to July, the number of beauty-industry business closures in Russia rose 52.5% to 12,300, according to data compiled for Kommersant by Kontur.Fokus. New registrations fell 16.1% to 13,000 over the same period.
Igor Stoyanov, founder of the Persona salon chain, links the trend to many entrepreneurs moving from the patent system to value-added tax (VAT). Previously, small businesses on the simplified tax system only had to pay VAT once revenue exceeded 60 million rubles; that threshold has now been lowered. He said this increased the tax and administrative burden on small companies, prompting some owners to shut down.
Lyalya Sadykova, president of the Association of Beauty Industry Enterprises and Professionals, said starting a new business has become “almost impossible,” and that a salon model that was profitable a year ago “doesn’t add up” under the new tax regime.
According to Rosstat, Russians spent 179.6 billion rubles on hairdressing and cosmetic services in January–June, up 16% year on year. But the main driver of salon revenue growth was not higher demand but higher prices: in July, a women’s haircut cost 13% more, at 980.5 rubles, a men’s haircut 16% more, at 767.4 rubles, and a manicure 9.8% more, at 1,500 rubles. Meanwhile, according to Platforma OFD, the number of receipts at beauty salons fell 4%, while the median receipt rose 10% to 1,900 rubles.
Vasily Mikhailov, founder of the Supermen barbershop chain, predicts the market will keep shrinking, leaving mainly “systemic players.” Sadykova, however, argues that “we are losing not the industry, but its legal, transparent, tax-paying part.”