Supercuts Parent Ready for Growth When Sales Increase

Last Updated Jan 28, 2010 6:27 PM EST

Regis Corp. (RGS), the owner of Supercuts, MasterCuts and other salon chains, might have some sales trouble right now, but management isn't counting on the slide to last. In fact, the company has growth plans in the works to add stores once things improve.


Regis didn't have a poor second quarter. Though its same-salon sales fell 3.7 percent year over year, income came in at $18.2 million, a vast improvement from the $143.3-million loss the company reported during the same period last year. And even though customer visits declined by 7.8 percent, the average sales ticket increased by 3.7 percent.

Once that sales dip turns around, we can expect to see more stores under the company's banner, said Paul Finkelstein, Regis' chairman and chief executive. "We certainly have all the liquidity and resources to resume our expansion strategy once comps normalize," he said during Regis' second-quarter conference call. "At that point in time, we should be building 400 salons a year and buying 400 salons a year."

This is much more optimistic news than about a year and a half ago, when Regis said it would close 160 stores. Adding about 800 stores a year would make the company quite large, as it already operates nearly 13,000 locations worldwide and is the biggest firm in its sector.

But Regis will not be alone in its growth. Long time competitor Great Clips could open up to 180 new stores this year, up from its current 2,700 locations. And since 2001, sports-themed chain Sports Clips grew from under 50 units to nearly 750.

Regardless of its competition, Regis definitely sees more potential for growth and consumers spending coming back. And if sales pick up, those possible customers could have more Regis-branded locations to choose from.