Former CEO Finkelstein Resigns From Regis Board
Regis Corporation announced Tuesday that former CEO Paul Finkelstein has resigned from his role as chairman and left the company's board of directors.
Finkelstein, who stepped down in February from the post of CEO at the Edina-based hair salon operator, resigned from the board Monday-earlier than planned. Regis did not provide a reason for the abrupt resignation.
In an October filing with the U.S. Securities and Exchange Commission, Regis-which hasn't yet named a new CEO-said that Finkelstein would serve on the board for up to two years following his resignation from the CEO post in order to support his successor and ensure a smooth transition.
Regis named Joel Conner, one of the company's directors, as independent chairman of the board, effective immediately. Conner is also the CEO of Duluth-based Bellisio Foods.
“We thank Paul for his service to the company,” Conner said in a statement. “On behalf of the board, we are excited for a new phase in Regis' growth.”
After Regis announced last year that Finkelstein planned to step down from the CEO post, the company said that its president, Randy Pearce, would succeed him. But in January, the company said that Pearce instead intends to retire in June.
Finkelstein became Regis' CEO in 1996 and chairman in 2004. Under his leadership, the company aggressively accumulated chains of salons, growing to nearly 12,500 salons that generated $2.4 billion in sales in 2010.
However, the company has struggled in recent years as consumers have reduced the frequency of their salon visits. Last year, the company announced plans to cut expenses by $40 million to $50 million over the next two fiscal years, but investor Starboard Value LP, which owns about 5 percent of Regis' stock, described the plan as insufficient. A contentious proxy battle followed, and Starboard won three board seats.
Then in January, the company announced plans to lay off 110, and about a month later, said it would eliminate at least half of its 50 store brands-which include Supercuts, MasterCuts, SmartStyle, and CostCutters-as part of its cost-cutting effort. In April, it entered into an agreement to sell its minority stake in Provalliance-the largest hair salon company in Europe.
“I am pleased with the progress the company has recently made,” Conner said. “This board remains committed to overseeing the positive change that is already underway at Regis and remains focused on enhancing shareholder value.”
Regis is among Minnesota's 20-largest public companies based on revenue, which totaled $2.3 billion for the fiscal year that ended in June. Last week, the company reported a loss of $1.4 million for the quarter that ended in March.