After 22 years of operation, Panache Hair Salon in Chapel Street’s Sherman Alley will close its doors Saturday.

Because of financial troubles, Panache owner Florence Pieczko is being forced to close up shop. Surrounding business owners expressed concern that the salon’s closing will decrease foot traffic in the already tucked away alley.

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According to court documents, Takashi Yoshikawa, one of three stock owners of the other Panache locations in Orange and Cheshire, Conn. filed a complaint against Pieczko for using assets for her own benefit and failing to properly account for expenses in May 2007. Yoshikawa claimed that Pieczko used corporate funds to pay for a life insurance policy originally intended to benefit all three stockholders and then later made herself and her family members the sole beneficiaries without informing Concetta Angelini, the third investor and Yoshikawa. Pieczko failed to appear in court and enter a plea. The judge eventually granted a motion for extension of time filed by Pieczko in 2008.

Pieczko is also closing her Cheshire location.

Pieczko declined requests to comment for this article.

Staff and neighboring business said they feared Panache’s closing will negatively impact stores in and around Sherman’s Alley.

Mary Johnston, an employee of the Tracy B Modern Apparel and Accessories store, said the businesses in the area benefit from the foot traffic that the other storefronts attract she said.

“We’ve lost a few storefronts in the past couple of weeks and it will negatively impact our business,” she said.

University Properties is the current landlord of the property. Abigail Rider, director of University Properties, said in an e-mail that she had not received notice that Panache was closing. Larry Spector, owner of Spector Eyecare, also said he was concerned about the economic impact of the closing.

“It’s bad on all accounts. It’s bad for the alleyway. The different businesses feed off of each other. For selfish reasons, I’m sad because my hair won’t be smooth anymore.”

According to Cassel, the Yale community made up 30-50 percent of the salon’s clientele.

Correction: November 11, 2010

An earlier version of this article misstated that Mary Johnston is the owner of Tracy B Modern Apparel and Accessories. She is an employee for the boutique. The owner of Tracy B is Tracy Bonosconi.