All in the family at Regis…
Late yesterday, Regis (RGS), a chain of mostly mall-based hair salons that we’ve been following pretty closely since we footnoted them a few months ago after they decided to exit the beauty school business, filed its proxy. Since late April, the stock is down over 20%.
But that hasn’t put a damper on various insider’s appetite for setting up side deals with the company. A company controlled by the father and son team of Myron and David Kunin (dad is vice chairman; David is a former executive and current director) received $1.2 million from Regis, more than double the $489K the company — it’s called Beautopia — sold to Regis in 2006. Another son of Myron (and brother of David) received $309K for magazine subscriptions. While that’s down slightly from the $374K spent in 2006, it
begs raises the question of what exactly Regis is paying for. Finally, there’s the $404K in commissions that a son of President and CEO Paul Finkelstein received for selling insurance to Regis executives and employees.
Needless to say, the company says that every one of these transactions costs about the same amount as deals with non-related parties would have cost. But you’d expect them to say that. And, given that three of the seven directors have family ties and the other four directors have all been directors for over 10 years, it’s hard to imagine any one really questioning these sorts of deals.