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Regis Refranchises All Its Mall-Based Hair Salons

Regis SalonsMinneapolis-based hair-care franchisor Regis Corporation (NYSE: RGS) announced Monday that it has sold substantially all of its company-owned mall-based hair salons in North America. The Beautiful Group, an affiliate of Los Angeles-based private equity firm Regent, has agreed to buy the salons in malls. Beautiful Group will operate them as Regis’ largest franchisee.

This transaction includes 858 of Regis’ North American salons and MasterCuts locations, which are mall-based salons, as well as the intellectual property rights related to MasterCuts and certain other trade names. The announced transaction also includes 250 international Regis Salons and Supercuts in the United Kingdom.

“In May of this year we announced that we had retained Huron Transaction Advisory to provide certain financial and investment banking services to assist in our review of strategic alternatives for our mall-based businesses. I am delighted that after a thoughtful diagnostic process we have reached a strategic conclusion that we believe will best serve our shareholders, employees and guests. This transaction further clarifies our strategy by focusing our company-owned salon portfolio in North America on the value segment. At the same time, this outcome is consistent with our strategic imperative to accelerate the growth of our franchise portfolio,” commented Hugh Sawyer, president and chief executive officer of Regis Corporation

.MasterCuts“We are fortunate to have found a high-quality partner in Regent’s chairman Michael Reinstein, who has an impressive record of success as a business owner with well-known companies, and we were able to keep these salons and employees as part of the Regis family of brands through the franchising arrangement. We are excited about our new partner’s vision to develop the business into a luxury brand through an elevated experience for our customers and stylists and look forward to a long-term, mutually beneficial relationship with the Regent team.”

The International portion of the transaction is expected to close in October 2017.

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Don Sniegowski is editor of Blue MauMau, the daily news journal for franchise & small business owners. Call him at +1 (270) 321-1268, tweet @bluemaumau or email