Regis Announces a Transaction Involving Certain Salons Operating Under the Regis® and Mastercuts® Brands
December 31 2019 - 4:15PM
Business Wire
Regis Corporation (NYSE: RGS), a leader in the haircare
industry, whose primary business is franchising, owning, and
operating technology enabled hair salons, today announced that The
Beautiful Group (TBG) transferred back to Regis approximately 200
mall-based salons operating primarily under the Regis and
Mastercuts brands that TBG previously acquired from Regis. As part
of the transfer, TBG also transferred back the Mastercuts brand and
other ancillary brands, and Regis terminated its remaining
agreements with TBG, including its licenses of the Regis brand to
TBG. The transferred salons are locations where Regis has
continuing obligations under real estate leases. The transfer was
effected in connection with an assignment for the benefit of
creditors by TBG.
“We are pleased to welcome back the many talented stylists
serving customers in these salons,” commented Eric Bakken,
Executive Vice President, President – Franchise of Regis
Corporation. “We believe that these salons, provide us with an
option to ultimately transfer many of these operations to new
ownership.”
Hugh Sawyer, President and CEO of Regis Corporation commented
"We remain committed to our strategy of converting to a fully
franchised model. However, in light of TBG’s performance, we
determined that resuming operational management of this relatively
small number of salons was the best path for us to mitigate our
risk and preserve long-term value for our shareholders.”
The liabilities assumed by Regis in connection with the
transaction are substantially limited to certain employee benefit
related payments. The remaining approximately 300 TBG salons for
which Regis has no lease obligation are expected to be closed by
TBG.
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.
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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version on businesswire.com: https://www.businesswire.com/news/home/20191231005199/en/
REGIS CORPORATION Kersten Zupfer
investorrelations@regiscorp.com
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