By  on January 28, 2009

Hair salon operator Regis Corp. Tuesday agreed to sell its troubled 709-unit Trade Secret division to Premier Salons Beauty Inc. While the firm will receive no proceeds from the sale, expected to close next month, it will receive a $56 million tax benefit from the transaction, with half realized during the current fiscal year and the remainder in fiscal 2010.

“This division had been highly profitable over many years, but based on current sales trends, Trade Secret was forecasted to have operating losses of over $23 million on a fully allocated basis in fiscal 2009,” said Paul Finkelstein, chairman and chief executive officer of Minneapolis-based Regis. “This category continues to face many challenges, including product diversion and increased competition, and the many new initiatives we have tried have been met with limited success.”

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