Regis Corp. Names New CEO, Plans to Cut Costs
Salon operator and beauty retailer Regis Corporation on Monday announced the appointment of Randy L. Pearce as its CEO effective February 2012.
Pearce currently serves as president of the Edina-based company. He will succeed CEO Paul Finkelstein who previously announced plans to step down as chief executive in February.
“We believe this is a great next step in what has been a thoughtful and planned CEO succession process begun more than three years ago,” Finkelstein said in a statement. “Randy has extensive knowledge of Regis and the industry and is the driving force behind the key operational and cost savings changes that are underway at the company.”
Pearce joined Regis in 1985 after spending four years with global accounting firm Coopers & Lybrand. He held several finance posts at Regis before becoming president in February of this year.
In a separate announcement, Regis said that its board has approved several strategic initiatives prior to its annual shareholder's meeting on October 27. The company expects to lower expenses by $40 million to $50 million over the next two fiscal years to improve earnings.
The company said that in order to cut costs, it will lower salon payroll costs by reducing turnover and enhancing leveraged pay plans, renegotiating contracts, and increasing technology use to reduce travel and printing expenses.
The announcements came about six weeks after New York-based Starboard Value LP-which owns a roughly 4.4 percent stake in Regis-asked the company to dramatically cut operating expenses and sell its non-core businesses, which include the Hair Club chain and 400 international salons. Regis said an evaluation of its non-core assets is ongoing.
Regis has struggled and trimmed expenses in recent years as consumers reduced the frequency of their salon visits amid the recession. Its net income dropped more than 79 percent in the fiscal year that ended in June 2011, and it reported a net loss totaling $8.9 million. Revenue, meanwhile, fell about 1.4 percent to $2.32 billion during the period-an improvement from a 3 percent drop last year.