Regis Names New Prez, Replaces Other Top Leaders

The management transitions are the latest in a series of changes within the Edina-based company, which has struggled as consumers have trimmed expenses and reduced the frequency of their salon visits in recent years.

Regis Corporation stopped exploring “strategic alternatives” in December and opted to remain an independent public company-but a just-announced round of leadership transitions suggests that it's still in a state of flux.

The Edina-based salon operator and beauty retailer announced Thursday that it has named a new president and implemented several other management changes.

Randy L. Pearce-who now serves as senior executive vice president and chief financial and administrative officer-will replace Paul D. Finkelstein as president, effective immediately, according to Regis. Finkelstein, who joined the company in 1987 and became president in 1996, will remain chairman of the board and CEO through 2011. In 2012, Finkelstein will serve only as executive chairman.

Meanwhile, Brent Moen, vice president of finance and corporate controller, has been appointed to senior vice president and chief financial officer-replacing Pearce as CFO. Additionally, David Bortnem-who used to serve as head of operations of Regis' MasterCuts brand-has been appointed to the newly created position of chief operating officer. In that new role, Bortnem will oversee all Regis brands in North America, and he will partner with and report to Pearce.

Regis has struggled and trimmed expenses in recent years as consumers reduced the frequency of their salon visits amid the recession. Net income totaled $42.7 million, or 71 cents per share, in the fiscal year that ended in June-an improvement from the net loss of $124.5 million, or 16 cents per share, reported in the company's previous fiscal year. Meanwhile, revenue for the full year fell about 3 percent to $2.36 billion.

For the second quarter that ended in December, Regis earned $14.5 million, or 24 cents per share-less than the 28 cents per share expected by Wall Street analysts and less than the $18.2 million, or 30 cents per share, for the same period the prior year. Revenue in the second quarter dipped 1 percent to $430.9 million. Finkelstein said last week that he was “disappointed” with the results and that “business remains challenging.”

In August, as Regis' fiscal year came to a close, the company announced that it would begin exploring “strategic alternatives”-prompting rumors of a possible sale or the substantial alteration of the company's business or strategy. Regis disclosed no developments with regard to its findings or intentions until December, at which point the board decided to continue with the company's existing business plan and remain an independent public company.

“We believe that our stand-alone strategy will deliver superior value for our investors in the long-term compared to the alternatives that were presented as part of our review,” Finkelstein said at the time.

On Tuesday, Regis announced that it has agreed to pay $56 million to increase its ownership stake in Provalliance from 29 percent to 46 percent. Provalliance operates salons, primarily under the brands of Jean Louis David, Franck Provost, and Saint Algue.

Regis operates more than 12,700 salons, cosmetology education centers, and hair restoration centers worldwide-including franchised locations. Those locations operate under numerous concepts, including-in addition to its namesake salons-Supercuts, MasterCuts, Cost Cutters, and Hair Club for Men and Women.