Regis Shareholder Asks for Board Refresh
Minneapolis-based hair salon franchisor Regis Corp. is in trouble with one of its investors amid mounting financial challenges.
Florida-based investment firm Galloway Capital Partners (GCP) has invested in Regis Corp. for over a year and owns 111,800 shares of the company’s common stock, or 4.9% of its outstanding shares, according to a Dec. 28 filing with the U.S. Securities and Exchange Commission.
Regis Corp., which was once among Minnesota’s top 25 revenue-generating public companies, has been struggling financially for years. Until fall of 2023, the company hadn’t reported a positive quarter since 2018. That changed in November, when Regis reported $1.2 million in quarterly net income.
But that was evidently not enough to keep Galloway satisfied.
“We are quite disappointed with the performance of the company’s common stock, which is -98% in the past four years, and -60% in just the past six months,” said GCP president and chief investment officer Bruce Galloway in a letter to Regis’ CEO and chairman. “We believe the company is significantly undervalued and requires our support and expertise in creating shareholder value.”
To boost Regis’ sales and stock market value, GCP is asking to add two new board members of its own choosing. Regis currently has eight board members in total.
Galloway also suggested that Regis expand its business beyond haircuts by selling additional products at its locations to increase revenue. “We believe there is still a long way to go to enhance revenue in the [Regis’] systemwide ‘footprint.’” he wrote. “At present, each location generates barely $300,000 in gross revenue, and only from haircuts. Your competitor Hair Cuttery Salons generates double the sales volume because they are more effective in offering ancillary services and products to their clients.”
Regis Corp. has not yet publicly responded to the firm’s statement.
Meanwhile, in a separate development, Regis stock is slated to switch from the New York Stock Exchange to Nasdaq on Jan. 9.
