SWOT Analysis of Regis Corporation Free Essay Example

Section I – Organizational History

Regis Corporation, a Fortune 1000 company, specializes in beauty salons, hair restoration centers, and cosmetology education. The Company owns, franchises, or holds ownership interests in approximately 12,700 worldwide locations (Regis Corporation, 2009).

Regis’ corporate and franchise locations operate under concepts such as Supercuts, Sassoon Salon, Regis Salons, MasterCuts, SmartStyle and Hair Club for Men and Women (Regis Corporation, 2009).

In addition, Regis maintains an ownership interest in Provalliance, which operates salons primarily in Europe, under the brands of Jean Louis David, Franck Provost and Saint Algue.

Regis also maintains ownership interests in Empire Education Group in the U.S. and MY Style concepts in Japan. System-wide, these and other concepts are located in the U.S. and in over 30 other countries in North America, South America, Europe, Africa and Asia (Regis Corporation, 2009).

In its nearly 9,500 North American salons, Regis offers a wide range of hair care services including haircuts, styling and coloring, as well as a wide selection of professional hair care products (Regis Corporation, 2009).

Through their 96 Hair Club for Men and Women locations, Regis also offers a comprehensive menu of hair restoration products and services (Regis Corporation, 2009).

Section II – Strengths and Weaknesses

I would consider two of Regis Corporation’s strengths to be their longevity & brand recognition and salon geographic locations. Two of Regis Corporation’s weaknesses are poor management and poor management.

Strength #1- Longevity & Brand Recognition

Regis began 88 years ago and since then has grown into a multi-billion dollar company. Regis Corporation owns several well-known brands such as SuperCuts, Master Cuts, Vidal Sassoon, and ProCuts.

They also have their own complete hair care line of products called DesignLine.

Strength #2- Salon Geographical Locations

Regis strategically places all of their salons in locations with high customer traffic flow such as malls, shopping centers, and Wal-Mart Supercenters. Having salons located in these areas allows for customer flexibility as well as a highly visible location for potential walk-in clientele. Regis is also has salons operating in Canada and Puerto Rico, as well as over 400 salons operating internationally in Europe (Regis Corporation, 2009).

Weakness #1- Poor Management

After reading many Regis employee reviews from glassdoor.com, the majority of cons the employees listed had to do the management. Employees described management as unconcerned with quality of stylists hired, unresponsive to employee’s needs and concerns, and low opportunity for advancement. Upper and lower level management need to be properly trained and incorporate employee empowerment which includes employee recognition, sharing leadership, and providing feedback (“Glassdoor.com,”).

Weakness #2- Poor Customer Service

After reviewing many customer reviews, many of the complaints were centered on customer service issues. Some customers complained they were rushed through their service and there were complaints of having to wait over an hour for their service even though they had an appointment. Bad customer service is bad for the hair business because you not only loose that one client; you also lose any future referrals from the client and it can develop a bad reputation for the salon itself (“Glassdoor.com,”).

Section III – Opportunities and Threats

Two current opportunities for Regis Corporation’s are their hair restoration businesses and the availability of real estate for new construction. Two of Regis Corporation’s current threats are the downturn of the general economic environment and their current negative same-store sales.

Opportunity #1- Hair Restoration Business

In December 2004, Regis Corporation acquired the Hair Club for Men and Women (Regis Corporation, 2009). Currently this industry is comprised with numerous locations domestically and internationally. By consolidating and expanding, this industry would generate a great deal of revenue. Growth plans for hair restoration include construction of a modest number of new locations in untapped markets domestically and internationally (Regis Corporation, 2009).

Opportunity #2- Availability of Real Estate for New Construction

The availability of real estate for new construction is an opportunity for Regis to continue to expand not only the new construction of salons but also the construction of new hair restoration centers. By adding new units in convenient locations with good visibility and customer traffic. The availability of real estate will allow Regis to achieve long-term growth objectives (Regis Corporation, 2009).

Threat #1- Downturn of the General Economic Environment

Downturn of the economic environment results in customers spending less and waiting longer between returning visits to the salon. General economic factors include interest rates, recession, inflation, deflation, tax rates and policy, energy costs, and unemployment trends (Regis Corporation, 2009). Visits to hair restoration centers would be greatly impacted by increases in unemployment rates and decreases in income levels (Regis Corporation, 2009).

Threat #2- Negative Same-Store Sales

Same-store sales is taking the amount of revenue generated by stores (open one year or more) over a certain period and then comparing it to an identical period in the past. Many factors affect same-store sales such as fashion trends, competition, or even weather conditions. Regis same-store sales have declined for the eleventh consecutive quarter to 2.3% (Zacks Investment Research, 2011). Continued declines in same-store sales performance may cause us to be in default of certain covenants in their financing arrangements (Zacks Investment Research, 2011).

Section IV – Summary

Regis is a well-known brand name and had been in business for over 80 years. Regis is one of the largest companies in the hair care industry holding about 2% of the worldwide market. Their salons are conveniently located in malls, shopping centers, and even within Wal-Mart Supercenters. They have salons located all across the United States and have expanded their business to Canada, Puerto Rico, and Europe.

Regis needs to improve on their employee satisfaction in regards to management and need to focus on improving customer service relations.

Regis’s newly acquired hair restoration line provides a great opportunity to consolidate and expand this industry in turn creating a great deal of revenue. The availability of real estate for new construction is also a great opportunity for Regis to expand in the construction of new salons and new hair restoration centers, which will allow Regis to achieve long-term growth objectives.

A threat to Regis is the downturn of the economic environment, which results in consumers spending less and waiting longer between salon visits. If Regis same-store sales do not begin to improve it will have a huge impact on their financing arrangements.