Hair care giant Regis Corporation today announced the signing of a definitive agreement to sell its Trade Secret retail product division to Premier Salons Beauty, Inc.

"After reviewing our strategic options, we made a decision to sell our Trade Secret division. This division had been highly profitable over many years, but based on current sales trends, Trade Secret was forecasted to have operating losses of over $23 million on a fully allocated basis in fiscal 2009," commented Paul D. Finkelstein, company chairman and chief executive officer. "This category continues to face many challenges including product diversion and increased competition, and the many new initiatives we have tried have been met with limited success. The decision to sell Trade Secret was difficult; however, with the likelihood of significant ongoing operating losses and capital investments, it is the right decision. The sale of the division will immediately strengthen our financial ratios and improve our overall profitability."

According to the terms of the agreement, Regis will not receive any proceeds from the sale transaction. The company expects to receive an income tax benefit and corresponding cash refund of $56 million as a result of the transaction. Half of this amount should be realized in fiscal 2009 and the other half in fiscal 2010. The sale is primarily a stock transaction and is expected to close on Feb. 15.