Regis acquires PureBeauty and BeautyFirst
PureBeauty and BeautyFirst in an effort to turn its fortunes around
and bring back sales growth.
Regis has recently been hit by increased competitive pressure in the hair salon market posting a decline in sales of 48.7 percent for the fourth quarter of 2007 to $27.8m from $41.5m the year before. The newly acquired chains will play a highly significant role in the future of Regis with its existing Trade Secret salons being re-branded to PureBeauty and most of its Beauty Express salons to BeautyFirst. The operations of the PureBeauty and BeautyFirst consist of 63 company-owned salons and 51 franchise salons operating in 20 states with consolidated annual revenues of approximately $65 million. Including the sales of franchisees, system-wide sales are approximately $110 million. Before the acquisition, which is expected to be closed in February, the company already held a 19.9 percent equity interest in PureBeauty and BeautyFirst. Regis CEO Finkelstein said: "This transaction will allow us to significantly accelerate our transformation of Trade Secret from a retailer of professional product to a boutique offering a broad assortment of beauty products. "We will be combining the best of all our brands, bringing together PureBeauty's and BeautyFirst's strength in skin, cosmetics and bath with Trade Secret's existing professional hair care platform and exceptional real estate. "Our customers have told us they want more than professional hair care products and, with today's increased competition and diversion issues, it is critical that we execute on the transformation of Trade Secret to a beauty boutique. "I am confident the transformation of Trade Secret will create significant shareholder value." More details on the acquisitions will be provided in the company's second quarter financial results which will be released on January 22. Regis is a leading player in the $150 billion hair care industry and derives a significant part of its revenues from the sale of a wide range of hair care products.