Regis® Announces Agreement to Franchise the Holiday Hair Brand & Sell an Additional 133 Company-Owned Salons to the Alline S...
December 17 2019 - 6:00AM
Business Wire
Regis Corporation (NYSE: RGS), a leader in the haircare
industry, whose primary business is franchising, owning, and
operating technology enabled hair salons, announced today they have
entered into an agreement for the sale and conversion of an
additional 133 company-owned salons located in the state of
Pennsylvania and surrounding areas to the Alline Salon Group,
formerly known as Super C Group. The salons being acquired are
currently branded as Holiday Hair®, Famous Hair®, Best Cuts®,
CityLooks®, Style America® and BoRics Hair Care®. One hundred and
five of the salons will be under the Holiday Hair® banner and the
balance will be converted to the Regis Cost Cutters® brand. The
transition and conversion began early December and will continue
into early 2020.
“We are pleased to expand our relationship with the Alline Salon
Group. Our partnership now covers Michigan, Ohio and Pennsylvania
and three brands: Supercuts, Cost Cutters and Holiday Hair. The
Alline Salon Group has created an excellent culture and built a
team of proven leaders. We are optimistic about our future
together,” commented Eric Bakken, Executive Vice President,
President - Franchise of Regis Corporation.
In late 2018, the Alline Salon Group purchased and converted 66
stores to Supercuts in Michigan. In early 2019, they purchased and
successfully converted 190 salons in Ohio to Cost Cutters and
Supercuts making them the largest Supercuts and Cost Cutters
franchisee for Regis. With this sale, Alline will also be the
Company’s largest franchisee and the sole Holiday Hair
franchisee.
“The Pennsylvania transaction marks the culmination of an
18-month process that resulted in the conversion or purchase of 389
salons which will operate under the Supercuts, Cost Cutters and
Holiday Hair brands. The brand diversity offers Alline the
opportunity to play in every segment of the hair industry with
enough scale and size to offer competitive pay packages and career
paths for stylist with different techniques and skill sets. As the
largest franchisee in the Regis family of salons, we are positioned
to become the employer brand of choice in the hair care industry,”
said Michael Sarafa, Managing Partner, Alline Salon Group. “The
focus in these salons will continue to be the relationships with
long-standing clientele. Our aim is to build a culture of service
that will transform the industry and capture more market share,”
Mr. Sarafa added.
Hugh Sawyer, President and Chief Executive Officer of Regis
Corporation commented, “Growing with competent multi-unit
operators, like the Alline Salon Group, strengthens our franchise
portfolio and further accelerates our strategy to convert to a
capital-light, technology enabled franchise business.” Mr. Sawyer
added, “Regis has a pipeline of 970 salons to be transitioned to
franchisees in various stages of negotiation. Although the process
is inherently dynamic, our pipeline represents approximately 50% of
our remaining company-owned salon portfolio when taking into
account expected closures of approximately 380 under-performing
locations.”
About Regis Corporation Regis Corporation (NYSE:RGS) is a
leader in beauty salons and cosmetology education. As of September
30, 2019, the Company franchised, owned or held ownership interests
in 7,092 worldwide locations. Regis’ franchised and corporate
locations operate under concepts such as Supercuts®, SmartStyle®,
Cost Cutters®, Roosters® and First Choice Haircutters®. Regis
maintains an ownership interest in Empire Education Group in the
U.S. For additional information about the Company, including a
reconciliation of certain non-GAAP financial information and
certain supplemental financial information, please visit the
Investor Information section of the corporate website at
www.regiscorp.com.
About the Alline Salon Group Alline Salon Group, LLC is a
Bloomfield Hills, Michigan headquartered company with salon
locations in six states representing three unique brands. Alline
operates Supercuts, Cost Cutters and Holiday Hair salon businesses.
Alline’s ownership team includes highly seasoned professionals from
the banking, hospitality, wireless and other service-oriented
retail industries. Alline strives to become the employer brand of
choice for successful and dedicated stylists who want the
opportunity to pursue a career in the hair care space.
Safe Harbor Statement This press release contains or may
contain "forward-looking statements" within the meaning of the
federal securities laws, including statements concerning
anticipated future events and expectations that are not historical
facts. These forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. The forward-looking statements in this document
reflect management's best judgment at the time they are made, but
all such statements are subject to numerous risks and
uncertainties, which could cause actual results to differ
materially from those expressed in or implied by the statements
herein. Such forward-looking statements are often identified herein
by use of words including, but not limited to, "may," "believe,"
"project," "forecast," "expect," "estimate," "anticipate," and
"plan." In addition, the following factors could affect the
Company's actual results and cause such results to differ
materially from those expressed in forward-looking statements.
These factors include the continued ability of the Company to
implement its strategy, priorities and initiatives; our and our
franchisee's ability to attract, train and retain talented
stylists; financial performance of our franchisees; acceleration of
sale of salons to franchisees; if our capital investments in
improving technology do not achieve appropriate returns; our
ability to manage cyber threats and protect the security of
potentially sensitive information about our guests, employees,
vendors or Company information; The Beautiful Group's inability to
operate its salons successfully, as well as maintain adequate
working capital; the ability of the Company to maintain a
satisfactory relationship with Walmart; marketing efforts to drive
traffic; changes in regulatory and statutory laws including
increases in minimum wages; our ability to maintain and enhance the
value of our brands; premature termination of agreements with our
franchisees; reliance on information technology systems; reliance
on external vendors; consumer shopping trends and changes in
manufacturer distribution channels; competition within the personal
hair care industry; changes in tax exposure; changes in healthcare;
changes in interest rates and foreign currency exchange rates;
failure to standardize operating processes across brands; financial
performance of Empire Education Group; the continued ability of the
Company to implement cost reduction initiatives; compliance with
debt covenants; changes in economic conditions; changes in consumer
tastes and fashion trends; exposure to uninsured or unidentified
risks; reliance on our management team and other key personnel or
other factors not listed above. Additional information concerning
potential factors that could affect future financial results is set
forth under Item 1A on Form 10-K. We undertake no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
However, your attention is directed to any further disclosures made
in our subsequent annual and periodic reports filed or furnished
with the SEC on Forms 10-K, 10-Q and 8-K and Proxy Statements on
Schedule 14A.
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REGIS CORPORATION Kersten Zupfer
investorrelations@regiscorp.com
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