Regis looking at strategic alternatives for mall-based salons

Regis Corp. announced that it is looking at strategic alternatives to its mall-based salons.

The Edina-based company owns, franchises, or holds ownership interest in 9,217 worldwide locations. Many of those locations are mall-based.

However, the company said Wednesday it is seeking the strategic alternatives for more than 900 locations, employing more than 7,500 stylists in the United States, Canada and Puerto Rico.

In April, Regis fired CEO Dan Hanrahan and later named Hugh Sawyer as CEO. Sawyer was a managing director of Huron Consulting Group Inc.

Regis has hired a subsidiary of Huron Consulting, Huron Transaction Advisory, to conduct the strategic review.

A Regis news release said that the business under review consists of two principal brands: Regis Salons, a premium upscale brand catering to women, and MasterCuts, a value-based option targeting price and "time conscious" customers.

According to the Regis website the company operates salons under 34 different brand names. Regis also owns and has an ownership interest in two different beauty school concepts.

Regis shares closed Wednesday at $9.45 per share, up 1.2 percent. However, the announcement was made after the markets closed. Shares of Regis have declined 35 percent this year.

Sawyer acknowledged last month in a statement accompanying quarterly results that financial performance had been "disappointing," and that he had challenges ahead of him in turning it around. Regis had first hired Huron to shift to a business model where more of the locations were owned by franchises.

While not revealing details of a short-term plan for company-owned stores, he said strategies would achieve better customer experience and better management of labor. He said the company would cease "programming" that didn't create value.

Patrick Kennedy • 612-673-7926