Regis/Supercuts is latest victim of tough UK retail market, names administrators
today Oct 25, 2019
The UK’s hair and beauty services sector may have been one of the more buoyant sub sectors of the retail market in recent years, but that fact hasn't helped long-established hair and beauty salon operator Regis UK, which owns the Supercuts brand in Britain, as well as its signature chain.
Despite being one of Britain's biggest chains, the company has called in administrators and 1,200 jobs are at risk as a result.
So what happens now? It seems the salons are staying open for the present as the administrator explores its options, with the company confident that a buyer can be found.
Regis has a long history in the UK and has been a major operator of hair and beauty salons in department stores, as well as having standalone sites. But the struggling UK arm was sold by its US-based parent company to private equity company Regent back in 2017 and the new owner doesn't seem to have had any more luck in boosting its operations than its previous parent had. It was placed into administration on Wednesday, although the news has only just emerged.
Deloitte has been appointed as the administrator of the business that includes 220 salons under the two brand names. They operate mainly in shopping centres and on high streets, both locations having suffered from declining footfall in recent years.
While it might seem that salons should continue to prosper – after all, it's not as if consumers can get their hair cut over the internet – the sector has become hugely competitive at the same time as other issues have weighed on profits. Innovative start-ups, such as Blow, plus the large number of hair and beauty professionals operating small businesses and visiting consumers’ homes, and the rise of specialists such as nail and brow bars, have all undermined the business model of large hair and beauty chains.
Added to their problems have been issues such as cautious consumers perhaps visiting the salon less often in order to save money, and also the trend cycle – long hair needs cutting less often than short styles and the chemical treatments, such as perms, that were popular in the past have fallen out of favour.
Additionally, increases in the minimum wage, higher pension costs and the toll taken by rent rises and business rates have all combined to further dent the company’s profitability.
Regis agreed a company voluntary arrangement with its creditors last year.
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