Regis to close up to 160 salons, take charge

(Reuters) - Hair salon operator Regis Corp (RGS.N: Quote, Profile, Research) plans to close up to 160 underperforming salons in fiscal 2009 as it tries to improve profits and will take a related charge.

The operator of the Vidal Sassoon and Supercuts chains said it expects to take a pre-tax charge of about $20 million to $25 million due to the store closings.

This includes about $4.5 million, or 6 cents to 7 cents a share, of incremental non-cash fixed asset write-downs, which have been recognized in the fourth quarter of fiscal 2008, the company said.

Regis, which owns 8,500 salons, is scheduled to report results for the quarter on August 20.

The remaining $15 million to $20 million related to lease termination costs is expected to be recognized mainly in the first half of the fiscal year ending June 30, 2009.

The majority of the salon closures are planned to occur in the first half of fiscal 2009, the company 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," Chief Executive Paul Finkelstein said in a statement.

The company said it plans to offer employment to associates affected by the closings at nearby Regis-owned salons.

Shares of the Minneapolis-based company closed up 3 percent at $27.31 Tuesday on the New York Stock Exchange.

(Reporting by Anne Pallivathuckal in Bangalore; Editing by Himani Sarkar)