Regis Corp., operator of the nation's largest chain of hair salons, said Monday that it had appointed Hugh Sawyer, a business consultant with an operations background, to succeed Dan Hanrahan as chief executive.
The change comes just months after Regis engaged Sawyer's employer, Chicago-based Huron Consulting Group, for help accelerating a shift to greater franchisee ownership of its salons.
Regis has struggled to grow and produce consistent profits after a multiyear update of its in-store technology system and restructuring of the regional management.
Its same-store sales were down 2.3 percent in the first half of its current fiscal year, the latest period reported, and overall revenue was off 5 percent. Earnings before taxes and other expenses were up, however, and the company had a marginal net profit in the six-month period.
Regis shares have been trading near a 20-year low and fell nearly 4 percent to $10.72 Monday on the news of the executive turnover.
Hanrahan joined Regis as president and chief executive in August 2012 after previously serving as CEO of Celebrity Cruises, the Miami-based cruise and resort firm.
He came in at a rocky time, just a year after the company had tried and failed to sell itself. Regis was also under attack from activist hedge funds seeking a better performance.
As chief executive, Hanrahan oversaw deployment of a point-of-sale system that gave its 9,400 salons a better grip on customer habits, but the effort took longer than expected. The firm more recently began studying ways to shift some of its 6,600 company-owned salons to franchisees.
"Dan has refined our vision for the future of Regis by focusing on our franchise business, which the board believes is critical to deliver increased shareholder value," David Williams, chairman of the Regis board, said in a statement.
Sawyer, 62, has been president or CEO of eight companies. Since 2010, he has been a managing director at Huron and leader of the operational improvement unit in its business advisory division.
"He has an extensive background in businesses with large sophisticated constituents facing complex circumstances," Williams said in the statement.
Regis said it will give Sawyer initial equity awards with an aggregate value of $5 million but he will not receive more stock later this year when it usually gives incentive pay to executives.