Investor tells Regis: Get leaner

  • Article by: THOMAS LEE , Star Tribune
  • Updated: August 17, 2011 - 12:07 AM

In a letter to CEO Paul Finkelstein, above, Starboard Value LP wants the hair-care giant to focus on North American salons.

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polaricecapAug. 17, 11 1:23 AM

"We struggle to understand the need for such a large amount of overhead cost," the letter said. "This imbalance of expense growth versus revenue growth has directly resulted in significant declines in profitability and operating margin." Might apply to the Federal Government too.

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playerAug. 17, 11 5:08 AM

American businesses listen to Wall Street (stockholders) and not to main street (customers)

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MikTekAug. 17, 1111:21 AM

How about not listening to a Hedge Fund that has only a 4.4% stake in Regis Corp. and try listening to your employees and customers!! Seems to make more sense that letting the "little" bully from Wall Street take over your board... Retention of employees also means retention of customers and increase in profits. Re-visit your stylists compensation plans and maybe certain name brand salons along the Atlantic can be profitable again...

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Cain2198Aug. 17, 1112:30 PM

I think this is a reasonably accurate assessment. In the good times, Regis' strategy was simply to buy up as many businesses as it could with the assumption that the profits would continue to flow in. Now that the economy has soured, they're left with a bloated corporate structure that lacks a coherent strategy, a surplus of brands, a tangled mess of disparate franchise agreements, and a management team that seems to alter its focus from week to week. It wouldn't surprise me to see job cuts, but it would surprise me to see those "cuts" made to the contingent that most deserve it: the upper management team that failed to come up with a coherent mergers and acquisitions strategy, who fumbled the aquisition of Sally Beauty, and who couldn't find an investment suitor after a much-publicized search. Instead the cuts will come on the backs of the lower rung of employees, the stylists, and the already overworked corporate employees.

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