business

Edina-based Regis Corp. said Wednesday it has hired bankers to explore "strategic alternatives to enhance shareholder value."

The announcement, which came after markets closed, offered no specifics and said the global hair care giant would not provide details on developments "unless or until" its board of directors makes a decision.

Regis CEO Paul Finkelstein did not return a phone call, and a spokeswoman said the company declined to comment beyond the statement.

Such steps can signal that a company is putting itself up for sale or looking to spin off a division. It also could indicate a significant shift in strategy or operations that might help improve traffic to its salons, which have seen sales drop since the recession as consumers extended time between hair cuts and colored their hair at home.

Regis' stock is selling at about the same price it fetched 10 years ago. Shares closed at $15.64 Wednesday before the announcement. Investors pushed the stock up as high as $16.99 in after-market trading.

Regis reports fourth-quarter earnings on Aug. 26, but its stock tumbled in June after the company said revenue declined 5.6 percent during the quarter and comparable sales dipped 2.7 percent.

Analysts contacted by the Star Tribune had not talked directly with Regis executives and declined to speak on the record, but said the news didn't come as a shock.

Finkelstein has expressed his dissatisfaction since the early days of the recession, when Regis began seeing declines in same-store sales for the first time in company history. Attempts to predict a rebound in sales have proved elusive, even as competitors such as Ulta Salons and Sally Beauty have started to show improvement in recent months.

Regis Corp. operates more than 12,700 beauty salons and related businesses in 30 countries across North and South America, Europe, Africa and Asia. In addition to its namesake Regis salons, the company's concepts include Supercuts, Sassoon Salons, MasterCuts and Cost Cutters. Regis also operates hair restoration centers Hair Club for Men and Women, and has a stake in Empire Education Group, a U.S. cosmetology school.

Some analysts speculated that Sally Beauty or a private equity firm could be potential suitors for Regis.

In 2006, Regis failed in its quest to acquire the Sally Beauty salon chain when the board of Sally's parent company, Alberto-Culver Co., worried about Regis' outlook after two consecutive earnings shortfalls. The two companies had earlier announced a $2.6 billion stock deal.

In the past year, Regis has improved its balance sheet by reducing overhead expenses and raising $336 million in capital. Regis spun off the unprofitable Trade Secret brand in a mostly stock deal in February 2009. But Trade Secret's parent company recently filed for Chapter 11 bankruptcy protection, still owing Regis $32 million. Regis has petitioned the court to be a "stalking horse" bidder in order to set an opening bid and avoid a fire-sale price on the Trade Secret salons. Unsecured creditors Procter & Gamble, Simon Properties and General Growth Properties oppose a potential sale to Regis.

Regis chose three firms helping to guide strategic review -- New York investment bankers Peter J. Solomon, and legal advisers Faegre & Benson of Minneapolis and Wachtell, Lipton, Rosen & Katz of New York -- specialize in mergers and acquisitions.

Jackie Crosby • 612-673-7335