The move is part of an in-depth evaluation of the company's salon portfolio, which has formed part of its continuing drive to enhance efficiencies and improve the bottom line.
The company says that it is targeting approximately 100 locations in US regional shopping malls, a further 40 locations in strip center concepts and around a further 20 in locations throughout the United Kingdom.
Closures dependent on lease agreements
The company says that the closures will coincide with the completion of lease agreements on the properties, adding that employees affected by the closures will be offered alternative employment.
The closures are the culmination of an 18 month long series of strategic initiatives aimed at cutting costs as a means of enhancing profits, says Paul Finkelstein, Regis CEO.
"We have expanded this initiative to include a comprehensive review of our 8,500 company-owned salons and we have identified for potential closure approximately 160 salons that do not meet our operating criteria," Finkelstein said.
"Closing these salons prior to their lease expiration dates eliminates a significant time drain on supervisory and corporate personnel and will be accretive to our bottom line profitability."
Closures could cost $25m
Regis estimates that the closures will cost the business approximately $20m - $25m during the course of the next 18 months, which will include $4.5m of incremental fixed asset write-downs that has been factored into the accounts for the fourth quarter of 2008.
The remaining $15m - $20m concerns termination costs and will be accounted for during the first half of fiscal 2009.
Back in April Regis reported increased profits for its third quarter, citing the current efficiency drive and price increases as the primary reasons for the improvement.
The company said that net profits for the period rose by more than 250 percent, up from $5.32m for the third quarter in 2007, to reach $19.96m - despite the fact that the results also included a $30m charge for its European merger with the Franck Provost Group.
Total sales turnover also showed a strong increase, growing 4 percent, from $655.1m in the third quarter of 2007 to reach $680.1m this year.
On the strength of this the company is looking for full fiscal year 2008 revenue growth of around 4 percent to $2.74bn, while for the fiscal year 2009 sales are expected to reach $2.85bn., representing growth of 5 percent.
