Supercuts 2002 Annual Report Download - page 15

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Table of Contents
Retail Products
The Company continues to place emphasis on the sales of higher-margin professional hair care products, with the result that such revenues
have become an increasingly important part of the Company’s business, having grown from 5.4 percent of total company-owned revenues in
fiscal 1987 to 30.0 percent in fiscal 2002. A significant portion of this growth has resulted from the introduction of national brand merchandise
in 1988, the acquisition of Beauty Express in November 1992 and Trade Secret in December 1993. The hair care products offered are primarily
shampoos, hair conditioners and styling and finishing products. The Company actively reviews its product line offerings and continuously
investigates the quality and sales potential of new products. The Company utilizes its national salon network as a testing ground for new
product formulations. There are many potential sources of supply for the types of products used or sold at the salons, and the Company is not
dependent upon any single supplier.
Site Selection
Strip Center Locations.
There are more than 40,000 strip shopping centers in the United States and Canada which provide the Company with
vast growth opportunity for new strip center salons. Regis’ financial strength, successful salon operations and national recognition causes the
Company to be an attractive tenant to strip center landlords. In evaluating specific locations for its non-mall brands for both company-owned
and franchise stores, the Company seeks conveniently located, highly visible strip shopping centers which allow customers adequate parking
and quick and easy store access. The Company believes neighborhood shopping centers anchored by the number one or two grocery chains in
the specific market, or a major mass merchant, provide access to a stable customer flow. Various other factors are considered in evaluating
sites, including trade area demographics, availability and cost of space, location of competitors, traffic count, visibility, signage and other
leasehold factors in a given center or area. All franchisee sites must be approved by the Company.
Mall Locations.
The Company is the largest shopping mall tenant which operates hair care salons in North America and has attained national
tenant status which makes the Company an attractive tenant for shopping mall owners and developers. Mall owners and developers typically
seek retailers such as Regis due to the Company’s financial strength, successful salon operations and status as a national mall tenant. In the
United States, there are approximately 1,800 enclosed malls which meet the Company’s size and performance criteria with six to ten new
shopping malls developed each year. Because the Company’s different salon concepts target different mass-market customer groups depending
on the size and location of the shopping malls, more than one of the Company’s salon concepts may be located in the same mall. As a result,
there are numerous leasing opportunities in shopping malls for its Regis, MasterCuts, Trade Secret and Mia & Maxx Hair Studio salons, of
which the Company has penetrated approximately 60 percent.
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