Minneapolis-based hair salon company Regis Corp. is selling its stake in the beauty school business.
On Monday, the company announced that it has reached an agreement to sell its interest in Empire Education Group. Regis currently has a 55 percent ownership interest in Empire.
The sale is aimed at allowing Regis to focus on its “ongoing strategic transformation,” said senior VP and general counsel Amanda Rusin in a news release.
Regis will receive “de minimis cash compensation” for its stake, according to the release.
Founded in 1934 in Pennsylvania, Empire Education Group has grown to 89 schools across 21 states, according to the company’s website. In 2007, Regis merged its own school division with Empire Beauty Schools.
Regis isn’t severing all ties with the cosmetology school chain. As part of a separate agreement, Regis will become Empire’s “employer of choice,” which designates Regis salons as the preferred employer for Empire graduates. In addition, Regis has been granted permission to host national hiring events at Empire locations.
“We expect this evolution of our partnership will provide an advantage to our franchise and company-owned salons in our efforts to recruit the stylist talent needed to support our future growth,” said Shawn Moren, Regis’ executive VP and chief talent officer.
The news comes as Regis continues to shift to a fully franchised business model. In August, the company announced plans to sell all company-owned salons. Regis now expects the transition to be “substantially complete” by the end of the calendar year. Last month, the company announced plans to cut about 290 jobs in the U.S. and Canada.
In its second quarter, the company reported a net loss of $9.4 million, down significantly from a profit of $6.5 million in the same quarter in 2019. Revenue also slid: Regis reported quarterly revenue of $208.8 million compared to $274.7 million in 2019’s second quarter.