Hair emergency: After 27 years of business, the Hair Hospital in Bismarck is closing.

The full-services day spa, massage, tanning parlor and salon has experienced significant revenue drops in the last three years, sometimes upward of 20 percent declines a year, said part-owner Nancy Swenningson. The partners decided on May 1 to close the business by May 31; they're planning to auction all of the salon's furniture and other supplies on June 7.

Competition in the market has become fierce; while the Hair Hospital was once one of the only full-service spas in town, it now has to compete with nearly 100 other salons, mini-spas and full-service spas.

"There's a lot of competition out there, a lot of new salons opening," Swenningson said.

Hair Hospital originally opened as the Hair Company in Mandan in 1981, then moved to its current space on Divide Avenue in Bismarck in 1984, said part-owner Karen Kerzman, who bought into the company in 1999.

Kerzman, who started with the Hair Hospital straight out of school 20 years ago, is disappointed to see the salon and spa close, but says it's for the best.

"Part of me says, 'I don't want this place to close.' I had so many opportunities here," she said. "I just feel blessed to have been able to work here."

She said she learned a lot from her former employer and Hair Hospital owner, Lil Steiner. In fact, Kerzman said she was given a job there after calling Steiner and saying: "You need a nail tech and I'm the person to hire."

Steiner started her off as a stylist, doing a little bit of everything. She later moved into doing nails, and Steiner gave Kerzman a lot of education on other aesthetics.

"It's kind of sad, because this is a great salon," Kerzman said. "The fact that we have to close it makes me really sad."

Employees are getting difficult to find in the tight market, she said. When she began, the salon and spa had about 23 employees. Now, it's down to 13.

"About a year and a half ago, we had four people leave," Swenningson said. "One of the other salons in town started scouting and calling and people started leaving."

That was a real shock, and the business lost money instantly. Then, a few months later, another employee left. The cycle was vicious, but understandable with the influx of new salons.

All 13 of the current employees at Hair Hospital have found other employment, but plan to stay through the end of the month, Swenningson said.

Kerzman has already found new employment, too.

"I just have to look ahead," she said.

(Reach reporter Crystal R. Reid at 250-8261 or at crystal.reid@bismarcktribune.com.)