A Big Hairy Deal
GRAND RAPIDS — From Day One, Panopoulos Salons has been synonymous with style. And now, 45 years later, the familiar company is going out in style.
Salon Enterprises of Grand Rapids, which owned the Panopoulos chain, sold the dozen salons last Friday to Regis Corp., the world’s largest operator of hair salons. The price and terms of the deal were not disclosed.
“This is a good hair day for everybody, our employees particularly. They were our main concern. We’ve had such loyal and wonderful employees for all of these years,” said Max Matteson, president of Salon Enterprises.
Regis Corp., based in Edina, Minn., has 51,000 employees worldwide and a 2-percent worldwide share of the $150 billion hair-care industry. The firm has a 4-percent share of the domestic market and had sales of $1.9 billion for the last fiscal year.
In February, Regis grew its revenues by 14 percent to a record $179 million from $158 million for the same month last year. Same-store sales rose by 0.7 percent in February. Regis will release its March figures on Thursday.
Regis has been in business for 83 years and has salons in the United States, Canada, Puerto Rico, the United Kingdom, France, Italy, Spain, Germany, Belgium, Switzerland and Poland.
In the states, the company’s largest brands are Regis Salons, MasterCuts, Trade Secret, Supercuts, Cost Cutters, SmartStyle and Style America. Vidal Sassoon is one of Regis’ largest international brands.
Regis, traded on the NYSE under RGS, has grown its salon base from 1,479 locations in 1994 to 10,400 last year. Regis also is Wal-Mart’s largest tenant with nearly 1,500 company-owned and franchised salons leasing more than 1.4 million square feet.
Regis has never experienced a same-store sales decrease in its history and its salons serve more than 150 million customers each year.
Christo Panopoulos founded the privately held Panopoulos chain of salons, opening the first one in 1960. The business has since grown to a dozen salons with six located in Grand Rapids, two in Holland, two in Lansing, and one each in Muskegon and Kalamazoo.
Panopoulos employed about 250 people at those locations, and Matteson said many would remain with the new ownership.
“Our main supervisor will be staying on, as well as one of the partners with the business will work as a consultant,” he said.
Salon Enterprises has owned Chic University of Cosmetology, which has campuses in Grand Rapids, Standale and Portage, since 1982. The school is not part of the sale. Matteson told the Business Journal that he would stay on as a Chic consultant and that David Morris would keep his post as director of the cosmetology school.
Salon Enterprises COO Mark McGregor and Vice President of Human Resources Sally Painter also will serve as consultants to the new ownership.
The sale to Regis Corp. isn’t a first for Salon Enterprises. Last year, the local firm sold its 21 Hair Cuts Plus salons to Regis. Despite knowing the buyer, though, Matteson said selling the Panopoulos chain wasn’t an easy thing for the company to do.
“This was a little bit of a difficult decision,” he said.
“But on the other hand, after weighing all the pros and cons, and after seeing how well the Hair Cuts Plus acquisition went through, we feel this acquisition will promote future success for both Panopoulos and the Chic schools.”
Matteson said bigger companies like Regis have more opportunities awaiting them in the future in today’s market. And selling to Regis means the firm’s employees now also have a greater chance at a better future.
“Panopoulos has had a wonderful 40-plus years of running. We’ve gained, I think, a pretty impeccable reputation specializing in the hair, skin, nail and body services,” he said.
“After weighing all the facts, we felt this acquisition will promote future success for the employees, the salons themselves, as well as the future of our new work force.”