Hairdresser Regis UK outlines CVA proposals

Regis UK, which owns hairdressing chains Regis and Supercuts, has proposed a company voluntary arrangement (CVA) as part of a rescue bid. The services firm is seeking rent reductions of between 25% and 100% at 151 of its 220 salons. It has said it is not proposing any closures. The proposal casts uncertainty on the future of its sites, which staffs 1,300 people. Its total portfolio measures 226,250 sq ft, according to Radius Data Exchange. Average store sizes at Regis are 1,035 sq ft, while Supercuts salons measure 940 sq ft on average. Regis has 86 sites totalling 98,010 sq ft, while Supercuts has 146 stores amount to 137,240 sq ft of space. Its stores are mainly located at shopping centres, department stores or supermarkets. Landlords that could potentially be affected by the process include Capital & Regional, Hammerson and intu. Regis has appointed Grant Thornton to advise on the CVA, which will be put to a creditor vote on 26 October. Jackie Lang, managing director of Regis UK, said: “This action has been taken to restructure our costs to ultimately enable reinvestment into the business to improve our digital platforms and our expertise in salon. If successful over 90% of our creditors will be unaffected.” Year of the CVA: A retail crisis Grant Thornton said the plan was discussed with the British Property Federation and has incorporated comments from the BPF into the proposal. Eddie Williams of Grant Thornton, the nominee for the business, said “the company has put forward a proposal to its creditors that seeks to amend some terms in its lease obligations and stabilise the business.” He added: “As part of this, there are no planned salon closures and as such, no employee redundancies are planned, which is a positive in the context of the challenges the high street has seen over the past 12 months and which continue to be prevalent.” Regis UK was sold by US-based Regis Corporation to The Beautiful Group last year. A first for the services industry Commenting on the CVA proposals, James Child, retail analyst at EG, said: “This latest call for a CVA is the first this year outside of the traditional retail domain, pulling the services sector into the turbulent headwinds which have faced food & beverage, department stores and the fashion sectors in 2018. “Traditionally immune from the rise of internet spend as consumers still demand that in-store experience, nine out of 10 transactions in the health and beauty sector still take place over the counter. “This will serve as a warning for Regis and Supercuts contemporaries not to make light of the economic and financial stresses and strains that the high street is currently facing.” To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette