Supercuts 2012 Annual Report Download - page 21

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Table of Contents
Hair Restoration Business Strategy:
On July 13, 2012, the Company entered into a definitive agreement to sell Hair Club to Aderans, Co., Ltd. for cash of $163.5 million
excluding closing adjustments and transaction fees. Subsequent to fiscal year 2012, the net assets of Hair Club to be sold met the accounting
criteria to be classified as held for sale and will be aggregated and reported in accordance with authoritative guidance in the Company's fiscal
year 2013 first quarter Form 10
-Q. The Company is currently anticipating recognizing an after-tax gain in the range of $8 to $12 million upon
closing of the deal. The transaction is expected to close in the first or second fiscal quarter of 2013, and is subject to customary closing
conditions.
Hair Club is the largest U.S. provider of hair loss solutions and the only company offering a comprehensive menu of proven hair loss
products and services. Hair Club leverages its strong brand, best-in-class service model and comprehensive menu of hair restoration
alternatives to build an increasing base of repeat guests that generate recurring cash flow for the Company. From its traditional non-surgical
hair replacement systems, to hair transplants, hair therapies and hair care products and services, Hair Club offers a solution for anyone
experiencing or anticipating hair loss. Hair Club's operations, presented under the Hair Restoration Centers reporting unit, consist of 98
locations (29 franchise locations) in the United States and Canada. The domestic hair restoration market is estimated to generate over $4 billion
annually. The competitive landscape is highly fragmented and comprised of approximately 4,000 locations. Hair Club and its franchisees have
the largest market share, with approximately five percent based on guest count. In an effort to provide privacy to its guests, Hair Club offices
are located primarily in office and professional buildings within larger metropolitan areas.
The following table sets forth the number of company-owned and franchise hair restoration centers opened at the beginning and end of
each of the last five fiscal years, as well as the number of centers opened, closed, relocated and acquired during each of these periods:
19
2012 2011 2010 2009 2008
Company
-
owned hair restoration centers:
Open at beginning of period
67
62
62
57
49
Constructed
6
3
4
8
3
Acquired
—
—
—
—
—
Franchise buybacks
—
4
—
2
6
Less relocations
(3
)
(1
)
(4
)
(5
)
(1
)
Site openings
3
6
—
5
8
Sites closed
(1
)
(1
)
—
—
—
Total company-owned hair restoration
centers
69
67
62
62
57
Franchise hair restoration centers:
Open at beginning of period
29
33
33
35
41
Acquired
—
—
—
—
2
Franchise buybacks
—
(
4
)
—
(
2
)
(6
)
Less Relocations
—
—
—
—
(
2
)
Site openings
—
(
4
)
—
(
2
)
(6
)
Sites closed
—
—
—
—
—
Total franchise hair restoration centers
29
29
33
33
35
Total hair restoration centers
98
96
95
95
92