Japanese hair salons are experiencing unprecedented financial distress, with a record 235 salons filing for bankruptcy last year, surpassing the previous record of 215 set in 2024 [1]. The average lifespan of a salon is projected to decrease to 13 years in 2025, down from 14.1 years in 2024, and nearly half (49%) of active salons are less than 10 years old [1]. This wave of bankruptcies is more severe than during the COVID pandemic, when government subsidies and zero-interest loans kept closures at a record low of 68 in 2021 [1].
The current crisis is attributed to a combination of inflation, rising operational costs (including electricity and hair products), and a looming oil crisis, all of which make it difficult for salons to lower prices to attract cost-conscious customers [1]. The situation is reminiscent of the 2008 global financial crisis, when consumers sought cheaper alternatives and discount chains like QB House disrupted the market, but the present environment is exacerbated by broader cost increases [1].
Staff shortages are compounding the problem, as many stylists are drawn to the higher wages and job security offered by large chains, leaving small and mid-sized salons struggling to recruit and retain talent [1]. Many new graduates from beauty schools aspire to open their own salons, resulting in high turnover at smaller establishments [1].
Market observers and readers point to oversaturation as a key factor, with too many salons competing for a shrinking customer base amid Japan's declining population [1]. Customers also note that even the cheapest haircuts now cost over 1,300 yen (US$8.30), and some believe discount salons offer better value and more experienced stylists due to higher customer volumes [1].
CONCLUSION
The Japanese hair salon industry is facing a record number of bankruptcies driven by inflation, market oversaturation, and labor shortages. With operational costs rising and consumer demand shrinking, especially as the population declines, the outlook for small and mid-sized salons remains challenging. Market sentiment is negative, and further consolidation in the sector appears likely.