American hair salons operator Regis has completed additional restructuring actions to improve its financial performance, following its ongoing transformation to a fully franchised business model.
Regis noted that the transition has allowed it to take further steps to eliminate administrative costs and personnel.
These additional restructuring actions are anticipated to deliver around $6m of annualised general and administrative expense savings to the company.
Regis said it has removed around $25m of annualised general and administrative expense costs during FY20. This includes several officer positions.
Regis chief operating officer who was in charge of company-owned salons has resigned as part of the company’s G&A expense reduction and organisational transition.
Meanwhile, the company re-started its refranchising process in June and has opened 84% of its system-wide salons as of the beginning of this month.
Last month, an additional 88 company-owned salons were transferred to its asset-light franchise business.
Regis chairman and CEO Hugh Sawyer said: “Despite the ongoing challenges associated with Covid-19, we are pleased that our strategic transformation is continuing.
“Although this aspect of our transformation is certainly difficult, it is necessary to properly allocate capital and human resources to support investments in our rapidly growing franchise business.
“Our salons continue to re-open and we were able to re-start the refranchising process after a brief hiatus. Further, despite uncertainty caused by the pandemic we are optimistic that the demand for our company-owned salons and core brands will continue.”
Regis has opened 88% of franchise salon locations and 68% of company-owned salons this month.
