Regis Reacquires Salons from The Beautiful Group
Photo by Edward Hands - Own work, CC BY-SA 4.0

Regis Reacquires Salons from The Beautiful Group

To protect against financial losses, Edina-based Regis Corp. has taken back about 200 salons it sold to The Beautiful Group in 2017.

Edina-based haircare company Regis Corp. announced Tuesday that it has reacquired about 200 mall-based salons from Beverly Hills-based salon operator The Beautiful Group.

Regis sold and franchised the salons—the majority of which were operated under the Regis and MasterCuts brands—to The Beautiful Group in 2017. Regis says it’s taking them back now to protect its financial interests.

In a Securities and Exchange Commission filing, Regis stated that if it doesn’t buy the salons, The Beautiful Group will close them and breach leases it has with Regis. (The Beautiful Group is expected to close 300 other salons it owns that are not leased with Regis, according to a Regis news release).

“In light of The Beautiful Group’s performance, we determined that resuming operational management of this relatively small number of salons was the best path for us to mitigate our risk and preserve long-term value for our shareholders,” said Hugh Sawyer, president and CEO of Regis Corporation.

Under terms of the agreement, Regis assumes ownership of all of the salons’ assets, including furniture, inventory, and supplies. Regis also will assume the salons’ liabilities and will look to retain the current employee base.

Additionally, Regis terminated all other remaining agreements with The Beautiful Group, including brand licenses.

This deal with The Beautiful Group comes after a year in which Regis—whose brands include Supercuts, Cost Cutters, MasterCuts, and Cost Cutters—has begun restructuring into a franchise-only business model. Regis execs believe that franchising minimizes costs and fosters a more localized salon approach.

In the last fiscal year, the company has closed more than 214 salons and sold more than 700 corporate-owned salons to franchisees. Of the company’s more than 7,000 total salons, more than half are now franchise-owned.

Sawyer said that The Beautiful Group transaction does not change the company’s restructuring strategy. The ultimate goal for The Beautiful Group Salons is to re-sell them to new owners.