Regis Corporation (RGS) recently appointed Eric A. Bakken, aged 45, as the interim chief executive officer (CEO), effective June 30, 2012. The management churn comes in the wake of the resignation of Randy L. Pearce from the position of president.
Pearce, who divulged his intent to retire in January 2012, was supposed to become the CEO of the company in February with the retirement of Paul Finkelstein. Pearce served Regis for 27 years.
In his provisional tenure as CEO, Eric A. Bakken will continue to work as executive vice president, general counsel and business development as well as interim chief operating officer. Meanwhile, Regis’ lookout for a competent and permanent CEO will be on.
Bakken’s association with Regis dates back to 1994 when he used to act as a lawyer to the company. Since then, Bakken held an array of leadership positions. Since 2010, he was serving as executive vice president of the company. Considering Bakken’s age-old alliance with the company, we believe, his style of operation will be in sync with Regis’ psyche.
The Edina-based Regis has been struggling for quite sometime with a slow traffic count, which remains a drag on its same-store sales. Apart from the dismal performance in one of key performance matrices, management witnessed another managerial change in January with the termination of chief operating officer David Bortnem.
Frequent changes in top management remain a cause of concern for Regis. Hence, the role of a new team will be vital as the company is currently struggling to turn around its comps. An element of uncertainty will linger till a permanent CEO is appointed.
Regis which competes with Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) has a Zacks #3 Rank, implying a short-term Hold rating on the stock. Our long-term recommendation for the stock remains Neutral.
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