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Table of Contents
PART I
Item 1. Business
Regis Corporation, the Registrant, together with its subsidiaries, is referred to herein as the “Company.”
(a) General Development of Business
During fiscal year 2003, there have been no significant changes to the Company’s corporate structure or material changes in the Company’s
method of conducting business.
(b) Financial Information about Segments
Segment Data for the years ended June 30, 2003, 2002 and 2001 are included in Part II, Item 8, page 76 of this Form 10-K.
(c) Narrative Description of Business
Background
The Company, based in Minneapolis, Minnesota, is the world’s largest owner, operator and franchisor of hair and retail product salons. The
Company’s worldwide operations include 9,617 company-owned and franchised salons at June 30, 2003. Each of the Company’s concepts
generally have similar products and services, concentrates on the mass-market consumer marketplace and generally display similar economic
characteristics. The Company is organized to manage its operations based on geographical location. The Company’s domestic operations
include 7,591 salons, including 2,427 franchised salons, operating in North America. The Company’s international operations include 2,026
salons, including 1,627 franchised salons, operating throughout Europe, primarily in the United Kingdom, France, Italy and Spain. The
Company’s worldwide operations utilize key brands such as: Supercuts, Jean Louis David, Vidal Sassoon, Regis Salons, MasterCuts, Trade
Secret, SmartStyle and Cost Cutters. During fiscal 2003, the Company and its franchisees provided services to 142.7 million customers
worldwide. The Company has approximately 49,000 employees worldwide.
Industry Overview
Management estimates that annual revenues of the hair care industry are $53 billion in the United States and $135 billion worldwide. The
industry is highly fragmented with the vast majority of hair care salons independently owned. However, the influence of chains, both franchise
and company-owned, has increased substantially. Management believes that chains will continue to have a significant influence on the overall
market and will continue to increase their presence. Management also believes that the demand for salon services and products will continue to
increase as the overall population continues to focus on personal health and beauty, as well as convenience.
3