Regis ask landlords for a rent reduction
The changing nature of the High Street and increasing costs of pensions have been named as two of the reasons that salon group Regis UK has asked its landlords to slash its rents.
The salon group, which owns Regis and Supercuts, has requested rent cuts of between 25% and 100% and has warned that if the changes are not approved ‘it is likely the company will enter administration’.
Regis UK employs 1300 staff in Britain across 223 salons which are often found in shopping centres and department stores and have championed speedy walk-in appointments. However, they have been heavily impacted by a decrease in footfall on the high street as online shopping continues to soar.
In a letter written to their landlords, Regis UK also cited the apprentice levy, changes to the law regarding pensions in 2017 and the costs of new technologies required for modern beauty trends as reasons behind their financial plight.
Regis UK have set out plans for a Company Voluntary Arrangement to help stabilise the business that is being overseen by Grant Thornton and are hoping to avoid making redundancies to its hair and beauty teams.
“As part of this, there are no planned salon closures and as such, no employee redundancies are planned, which is a positive in the context of the challenges the high street has seen over the last 12 months,” Grant Thornton partner Eddie Williams told The Standard.
Commenting on the challenges that the company face, Hilary Hall, NHF Chief Executive, added: "This is obviously a very anxious time for Regis and their employees. It’s not surprising that they are negotiating with landlords to reduce rents, in the same way that many other high street businesses have done to avoid going into administration.
"But rents are only part of the picture, as they also face the same challenges as other salons with rising costs, particularly business rates, while also experiencing declining footfall in high streets. "Regis has the additional challenge of being one of the very few employers in our sector who are large enough to have to pay the apprenticeship levy. The levy is effectively an additional tax to raise money which is ring-fenced for apprenticeship training. Other large groups are usually franchises and therefore don’t have to pay the levy. As the levy only applies to employers with a paybill of £3m or more, the vast majority of salons are too small to be affected."
