The robbery was reported at about 9:50 a.m. at Sally's Beauty Supply in the 6800 block of Camino Arroyo, according to police.
A man allegedly confronted a clerk in the business and threatened to have a handgun, although none was seen. The suspect demanded money and fled on foot after taking an undisclosed amount of cash, police said. No one was injured in the incident.
Arriving officers conducted a thorough search of the area but did not locate the man.
Police are describing the suspect as a Hispanic man between the ages of 35 and 45 years old who is about 5 feet 3 inches tall and weighs 200 pounds. He was unshaven with a moustache and was wearing a black fishing hat, dark gray sweatshirt and faded black pants.
Anyone with information about the incident is urged to contact the Gilroy Police Department at (408) 846-0350 or the anonymous tip line at (408) 846-0330.