Regis sees $38M one-time charge related to salon closings
On January 8, Regis announced a restructuring of its SmartStyle portfolio, pursuant to which it will close 597 non-performing Company owned SmartStyle salons (which includes 8 TGF locations) on January 31, 2018. Regis intends to offer many impacted stylists and salon managers comparable positions in other SmartStyle or Regis family of brands salons. The action delivers on Regis' commitment to restructure its salon portfolio to improve shareholder value and position Regis for long-term growth. Regis anticipates total net one-time charges of approximately $38M in connection with the salon closures, of which approximately $36M will be paid in cash. The cash charges include approximately $1M of severance and approximately $35M of costs to terminate the leases and return the vacated salons to pre-occupancy condition. Approximately $27M of cash disbursements associated with the salon closures occurred during the second fiscal quarter. The approximately $2M of net non-cash expenses relate to $5M of impairment and write-off related charges partially offset by $3M of non-cash benefit related to deferred rent balances associated with the salon closures. The 597 non-performing salons generated negative cash flow of approximately $15M during the twelve months ended September 30, 2017.