Ecuador RPCV Tom Boitz establishes Minnesota beachhead in salon war
Neal St. Anthony/On Business: Former Marine establishes Minnesota beachhead in salon war
Neal St. Anthony
Published July 3, 2003
NEAL03
His pals in Charlie Company, 1st Battalion, 7th Marines saw Sgt. Tom Boitz as a hard-charging, unfocused 20-year-old who would end up a cop or a bricklayer.
"I didn't have a drive for business 20 years ago," recalled Boitz, 40, an Anoka High grad who's also now a veteran of the Peace Corps and business here and abroad.
Things change.
Boitz, in his latest business venture, has invested about $250,000 to become the Minnesota franchiser of Fantastic Sams and opened 20 of the hair salons through franchisees of the California-based chain.
Boitz and 27 other regional franchisers this month plan to make a bid to buy Fantastic Sams from its parent, Opal Concepts, which is in bankruptcy. A regional franchiser in New England has made a $13.5 million bid for Fantastic Sams, which has about 1,300 shops nationwide.
The Boitz-related bid will be considered later this month by a California bankruptcy judge.
"We want to do this because our ownership group can control its own destiny this way," Boitz said. "The owners in the past have tried to make a quick buck. The regional owners don't need to make a profit on the corporate entity because we're making profits in the regions. But we need the company aligned with us to put up more salons, grab market share and improve profits."
Edina-based Regis Corp., with 9,300 salons, is the country's largest barbershop chain through Regis, MasterCuts, Cost Cutters and other retail brands. In May it paid $10.4 million to acquire 286 other salons from Opal Concepts, mostly in Texas.
The Twin Cities also are home to Edina-based Great Clips, with more than 1,900 shops in North America.
Boitz, who lives in Alexandria and operates out of a five-person office in Otsego, just northwest of the Twin Cities, predicts that he'll add 80 franchised Fantastic Sams shops during the next five years to the 20 now in rural Minnesota and the Twin Cities suburbs. Despite the competition from other chains, he sees opportunity in further consolidation of the haircut trade, where more than 90 percent of the shops are small operators.
Boitz's wife, Karina, 34, an engineer he met while serving in the Peace Corps in Ecuador, also is a franchisee, with four shops that expect total revenue of close to $1 million this year.
A typical franchisee puts up $30,000 to get a store, plus finances up to $120,000 to lease a site, remodel and stock it and provide working capital.
"The typical franchisee is somebody with a net worth of at least $250,000, with some business experience, and is more an investor than somebody trying to buy a job," Boitz said. "They hire a stylist/manager. And the average stylist should make $40,000 or more in a busy shop, including tips."
Boitz said he pays himself $48,000 a year, less than a third of what he made in regional sales and management jobs during his top years at DHL Airways and USA Floral during tours of the East Coast and Latin America.
"That's just what I need to live," Boitz said. "Everything else goes into building the business."
Boitz, his wife and two daughters returned to Minnesota in late 2001 from Miami. After working for several corporations, he wanted to run his own show, financed with savings and gains on real estate transactions.
"I'm not surprised that he went into business for himself," said Katy Schumacher, who is chief executive of an Oakland, Calif., company that ships wine around the country and who was Boitz's boss at DHL and a failed Internet company called Wineshopper.com. "He's absolutely one of the most determined people I've ever met in my life. I've never seen anyone work around the clock like him. He's relentless about getting people to say yes -- but in a nice way."
Boitz joined the Marines because he wasn't ready for college in 1982. Discharged in 1986, he earned a business degree from St. John's University. He was working and studying international management at the University of St. Thomas when he decided to join the Peace Corps in 1990.
"I wanted some more adventure," he recalled.
He was shipped to Ecuador to team up with the working poor, such as seamstresses and carpenters, to finance and expand tiny businesses in a country where few banks lend to those who have little means. He nearly caught a bullet fired into a bus by highwaymen amid a harrowing robbery there.
"They didn't like me, an American without much money, and another guy who had lied about a hidden money belt they found," Boitz recalled of the robbers. "But the getaway drivers wanted to get out of there. The next week the same gang killed a policeman on that bus from La Libertad to Quito, Ecuador."
Ironic note: Boitz was never fired on while he was in a Marine rifle squad, only in the Peace Corps.
Having had enough adventure, Boitz in 1992 married Karina and made plans to come back to the States.
A year later, he was the father of a newborn and nearly broke. He rented a Minneapolis apartment, borrowed $1,000 for an old car, and took a sales job with DHL.
He proved a success as an accounts manager, and in 1995 Schumacher brought him to New York to manage DHL's global-courier business for New York's largest banks.
"When we took over the bank group accounts, we were losing our business to the competitors," Schumacher said. "Tom just never gave up on an account until he got business. He would stay late to put together bids and plans, and he would show up at 5 a.m. to talk to Europe. He was also strategic, very big-picture. Not all sales people are like that."
Next, Boitz, who is fluent in Spanish, moved to Fort Lauderdale to become DHL's director of sales, marketing and business development for Latin America and the Caribbean.
The family, renters in Brooklyn, bought a nice home in Fort Lauderdale, thanks to Boitz's salary and bonus that topped $150,000. In September 1999, Boitz followed Shumacher to Wineshopper.com.
"The salary was only $80,000 but I got 50,000 stock options so I knew I was going to be a millionaire!" Boitz joked. "I left before it folded."
In May 2000, he was hired as the general manager of the e-commerce division of USA Floral, a debt-laden consolidator of several dozen floral businesses that collapsed into bankruptcy in the spring of 2001.
"I hung on for a couple of months," Boitz said. "I had to tell a lot of people they had no jobs. It was time to move on. I'd made a little money in business, and I'd bought and sold three houses in south Florida. I started to investigate business opportunities, and we decided to come back here and raise Gabriella [10] and Ashley [9]."
Boitz's bet is that he'll find prosperity, if not as much adventure, in the hair business.
If so, he could pursue his retirement plan -- a house on the beach.
In Ecuador.
"I'd like to be a coffee farmer, too. I love it there."
Neal St. Anthony can be reached at 612-673-7144 or nstanthony@startribune.com.
