Regis Corporation, the hair care chain based in Edina, has announced it will be closing 600 “nonperforming” Regis SmartStyle salons, which are located inside Walmarts, on Jan 31. It will leave it with 2,000 other salons, also located within Walmarts, with the decision being taken “to improve shareholder value and position the company for long-term growth.” It’s not been announced yet which Smart Styles will close, with Regis saying it will offer stylists and managers jobs at other locations, as it intends to grow the salons it’s keeping.
According to the Regis website, there are currently 39 SmartStyle salons at Walmart locations in Minnesota. While the closing locations have not yet been revealed, it’s probable that at least some of those affected will be in Minnesota. Most of the state’s Smart-Style salons are found in Walmart’s outside of the Twin Cities. Salons in the metro area are located at Maple Grove, Blaine, Brooklyn Center, Burnsville, Lakeville and Shakopee Walmarts. The Business Journal notes that Regis’ move to close the company-owned locations comes after a period of months in which its sold 1,000 of its other salons to a private equity firm and hundreds more SmartStyle locations to franchisees. It comes despite Congress recently passing a tax bill that will cut corporate tax rates from 35 percent to 21 percent, which is expected to significantly reduce major companies’ bottom lines. But CEO Hugh Sawyer said the decision is “consistent with our multi-year strategic plan” that will allow it to grow its remaining salons.
Regis CEO Hugh Sawyer said that the closings of the “nonperforming” locations was another step in the company’s efforts to restructure its business. The company has been working to re franchise many of its company-owned stores and improve performance at the locations it’s holding onto. Regis splits its business between value-based brands, like Smart Style and Supercuts, and premium brands like Regis Salon. Sawyer took over as CEO last April, replacing Dan Hanrahan. Previously, Sawyer had worked at Chicago-based Huron Consulting Group, which Regis had hired to help it evaluate strategic moves for some of its salons. Since then, Regis has sold 1,000 salons to Los Angeles-based private equity firm Regent, sold hundreds of other SmartStyle locations to franchisees and closed other company-owned sites.
“Regis is committed to maintaining our leadership position in the salon industry,” Sawyer said in a statement. “As a result, we are making significant strategic and operational changes to our business to increase customer traffic, invest in new technologies, decrease non-strategic costs, expand our franchise capabilities and create a new Eco-system for customer interaction.” Regis said it doesn’t plan any further moves in its SmartStyle salon portfolio for the near future. It’s not clear how many employees will be affected; Regis said that it plans to offer many stylists and managers jobs at other locations. Regis ranked No. 25 on the Business Journal’s list of largest public companies in Minnesota last year with revenue of $1.75 billion. That revenue is expected to decline this year; prior to the latest round of closings, analysts had forecast 2018 revenue of about $1.25 billion.
You must be logged in to post a comment.