Regis Corp., which owns the “Hair Club for Men” as well as Supercuts beauty salon, this week said it was exploring strategic alternatives. Regis has tapped Peter J. Solomon Co. as its financial advisor. For the uninitiated, “exploring alternatives” or “considering strategic options” usually means a sale.
Crescendo Partners, a hedge fund that recently bought a stake in Regis, issued a statement saying it was supporting the company’s decision to seek out alternatives.
“The most valuable scenario for Regis would be a PE deal,” a source says.
Minneapolis-based Regis owns beauty salons like Supercuts, Sassoon Salon and Cost Cutters as well as the Hair Club for Men and Women.
The company’s stock has been volatile. On July 20, Regis shares hit a 52-week low of $12.84. The stock is currently trading at $18.65, up 1.91%.
In July, Regis reported that consolidated fourth quarter revenue dropped 6% to $589.8 million for fourth quarter ended June 30 from $624.7 million in 2009. Consolidated same store sales also saw a 2.7% decline. The company plans to report full earnings this month.
Most of Regis’s revenue comes from its hair salons, which produced about $550 million revenue in fourth quarter. Its hair restoration center’s generated about $36 million for the quarter.
It’s not clear what Regis would be sold for or what PE shops would buy it. But PE firms have been involved in the hair care space. TSC Consumer currently owns Alterna while Catterton Partners has invested in Dr. Miracle’s. In 2009, Rustic Canyon/Fontis Partners bought Johnson Products.
Press reports have also mentioned Sally Beauty, which is owned by Clayton Dublier & Rice, as a possible buyer.
Regis could not be reached for comment. Officials for Crescendo and Peter J. Solomon declined comment.