Regis Corporation

Our objective is to continue double-digit growth in sales and profits. We plan to enter the twenty-first century as a billion-dollar company. Our locations are prime. Our associates are the best trained in the industry. Continuing strong results reflect both sound strategy and good execution. We are fashioned for profitable growth. Paul Kunin goes into business; his chain of salons eventually numbers 60. The company returns to private ownership and merges with Curtis Squire Inc. to form Regis Acquisition Corp., under the control of Myron Kunin. The company merges with MEI Diversified Inc. to form MEI-Regis Salon Corp. A troubled relationship with MEI is settled after lawsuits and MEI's bankruptcy. The company enters the beauty career education business with the purchase of four Vidal Sassoon academies. The company purchases Hair Club for Men and Women and enters the hair replacement industry. Regis Corporation is the world's largest owner and operator of mall-based hair and retail salons. Atypical of the industry, the company owns, rather than franchises, the vast majority of its salons, which are operated under six divisions: Regis Salons, Promenade Salon Concepts, MasterCuts, Trade Secret, SmartStyle Family Hair Salons, and International. Regis Corporation's history began with Russian-born barber Paul Kunin, who set up business in 1922. He built a chain of about 60 shops located in leased space in smaller-city department stores. "My father was never in the top department stores in Minneapolis. He was in the good places in Fargo," said Myron Kunin in a November 1985 Corporate Report article. Although Kunin had grown up working in the shops, it was his father's real estate ventures that he found intriguing. Myron Kunin and his sister Diana bought the business in 1954. Their father kept the real estate holdings, however, and Kunin had to settle for being in the hair care business. Kunin eventually bought his sister's share of Regis Corporation and began trimming back the number of downtown department salons. In the mid-1960s, he began opening salons in the enclosed malls that were beginning to spring up in the suburbs of middle-sized and small-sized cities around the country. The new salons had an upscale image and upscale prices. By 1975 Regis Corporation owned 161 salons, and sales for the fiscal year were $10.6 million. Regis was an anomaly in an industry that was, according to William Swanson, "better known for its small-time mom-and-pop operations, managerial unevenness and generally meager earnings." Whereas the other hair care chains generally were franchised, Regis owned and operated its salons, which allowed for more control over the business. Compound annual sales grew by 29 percent and earnings per share grew by 32 percent for the period between 1978 and 1983. Regis became publicly owned in April 1983. The company operated more than 300 salons at the time. Piper, Jaffray & Hopwood analyst Dick Pyle, cited by Swanson, said Regis's success as a salon owner and operator was most likely due to factors such as knowledge of the business, good site selection, favorable leases, steady growth, fair treatment of employees, and consistency of image. Its Regis Hairstylists salons catered to a mostly female clientele--women who were willing to pay upper-end prices for trend-setting services and products. In 1984, Regis bought a chain of about 60 shops that targeted male customers. But according to a 1989 Fortune magazine article by Julianne Slovak, write-offs related to the Your Fathers Mustache purchase cut into earnings for two years, and Regis converted the salons to other concepts. Executive Vice-President Peter Fudurich, who joined the company in the 1960s when the California chain he worked for was purchased by Kunin, was in line to succeed Kunin as president. Kunin trusted Fudurich and the management team to oversee daily operation of the company. Kunin, already in 1985, had a number of interests outside of Re