FORM 10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1997

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
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Commission file number 0-11230
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Regis Corporation
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(Exact name of registrant as specified in its charter)

Minnesota 41-0749934
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State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)

7201 Metro Boulevard, Edina, Minnesota 55439
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(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (612) 947-7777
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

None None
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Securities registered pursuant to section 12(g) of the Act:

Common Stock, Par Value $.05 per share
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(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ ]

The aggregate market value of the voting stock held by nonaffiliates of
registrant (based upon closing price of $23.91 per share as of September 15,
1997, as quoted on the NASDAQ), was $395,025,216.

The number of outstanding shares of the registrant's common stock, par
value $.05 per share, as of September 15, 1997, was 23,338,425.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Proxy Statement dated September 16, 1997 and
Annual Report to Shareholders for the year ended June 30, 1997, are incorporated
by reference into Parts I, II and III.

PART I
ITEM 1. BUSINESS
BACKGROUND

Regis Corporation (the Company), based in Minneapolis, is the largest owner,
operator and franchisor of hair and retail product salons in the world. The
Regis worldwide operations include 3,293 hairstyling salons at June 30, 1997
operating in six divisions: Regis Hairstylists, Supercuts, MasterCuts, Trade
Secret, Wal-Mart and International. Worldwide operations include 2,484
company-owned salons, 757 franchised Supercuts salons and 52 other franchised
salons operating primarily in the Trade Secret division. The Company has
more than 25,000 employees worldwide (excluding franchisee operations).

INDUSTRY OVERVIEW

Management estimates that annual revenues of the haircare industry were $40
billion in the United States and $80 billion worldwide. The industry is
highly fragmented with the vast majority of haircare salons independently
owned. However, the influence of chains, both franchise and company-owned,
has increased substantially, although still accounting for a small percentage
of total locations. Management believes that chains will continue to
increase their presence. Management also believes that the demand for salon
services and products will increase in the next decade as the population ages
and desires additional haircare services such as coloring.

BUSINESS STRATEGY

The Company's goal is to provide high quality haircare services and products
to customers in different market groups through physically attractive salons
in high traffic shopping mall locations. The key elements of the Company's
strategy to achieve these goals are the following:

CONSISTENT, QUALITY SERVICE. The Company is committed to meeting its
customer's haircare needs by providing competitively priced services and
products in convenient locations with professional and knowledgeable
hairstylists. The Company's operations and marketing emphasize high-quality
services to create customer loyalty, to encourage referrals and to
distinguish the Company's salons from its competitors. The major services
supplied by the Company's salons are haircutting and styling, hair coloring,
shampooing, conditioning and permanent waving. To promote quality and
consistency of services provided throughout the Company's salons, Regis has
full and part-time artistic directors whose duties are to teach and train
salon operators and to instruct the stylists in current styling trends.

During fiscal 1997, the Company and its franchisees provided services to more
than 70 million customers worldwide.

MALL-BASED LOCATIONS. As the largest national mall-based operator in the
hair salon industry, the Company has the ability to obtain desirable
locations in high-profile, regional malls anchored by major department
stores. Mall owners and developers typically seek retailers such as Regis
due to the Company's financial strength, successful salon operations and
status as a national mall tenant. The Company's locations, which are
aesthetically appealing and designed to attract customers from mall shoppers,
provide a steady source of new business.

STRIP-MALL-BASED LOCATIONS. The merger with Supercuts on October 25, 1996,
positions the Company in the rapidly growing strip shopping center segment of
the retail haircare market in the United States (see below). Supercuts
salons are conveniently located in strip shopping centers with adequate
traffic, appropriate trade area demographics, good visibility within the
center or from adjoining streets, effective signage, easy access and adequate
parking. Supercuts seeks to locate its salons in so-called "power strips",
anchored by the number one or two grocery chain in the specific market or
alternatively, a major mass merchant.

MULTIPLE SALON CONCEPTS. Regis operates primarily six salon concepts; Regis
Hairstylists, Supercuts, MasterCuts, Trade Secret, International and
Wal-Mart. Regis' various salon concepts in the United States address the
major segments of the salon market. The Company's regional mall salon
concepts provide the Company with the ability to have multiple locations in a
single mall and the flexibility to convert concepts if mall demographics or
customer preferences shift.

Regis Hairstylists appeal primarily to women and are positioned at the
moderate-to-upscale end of the salon market. MasterCuts appeal to the more
value-conscious customer with promotional or discount prices and have a
higher percentage of men and children as customers. Trade Secret provides
hairstyling service and a broad selection of quality haircare and beauty
products sold only through professional salons. Because the square footage
for each of these concepts is approximately the same, the Company has the
ability to determine which salon concept is best suited to a new location and
change the concept of existing salons to meet demographic changes in the
salon's market.

The Company also operates salons outside of the mall concepts, as mentioned
previously. Supercuts primarily targets the male population with affordable
hair care salons in strip centers. Salons located in Wal-Mart stores and
supercenters offer promotionally priced, family-oriented hair care. The
International salons are located in department stores, hotels and stand-alone
locations and are primarily focused on the moderate-to-upscale market.

EXPANSION. The Company has grown through increased revenues from existing
salons, constructing additional salons, and mergers and acquisitions. During
the five year period ended June 30, 1997, the Company has added 2,094 net
units (including franchised salons) to its worldwide salon base from new
salon construction and merger and acquisitions. During this same period of
time, the Company added new operating divisions, Trade Secret and Wal-Mart,
merged with Supercuts (see below), and expanded its Regis Hairstylists,
MasterCuts and International salon divisions. In addition to continuing its
salon acquisition strategy, the Company expects to construct about 200 new
company-owned salons and complete approximately 60 major remodeling and
conversion projects during fiscal 1998.

Effective October 25, 1996, the Company received shareholder approval for the
merger agreement with Supercuts in a stock-for-stock merger transaction.
Supercuts was the national operator of approximately 420 company-owned, and
franchisor of approximately 750 affordable hair care salons at the
acquisition date. Each Supercuts shareholder received 0.40 shares of the
Company's common stock in exchange for each Supercuts common share or
approximately 4,500,000 shares of the Company's common stock. The
transaction has been accounted for as a pooling-of-interests.

The Company intends to continue to focus future growth of the Supercuts
division in strip shopping centers across the United States, as it adds
additional company-owned Supercuts salons, and assists current and new
franchisees in their expansion and market development. The Company believes
the growth opportunities in the strip shopping center segment of the retail
haircare market in the United States are vast, and will complement the
Company's continuing growth of other divisions. The Company does not intend
to refocus other divisions, now located in enclosed shopping malls throughout
the United States, into the strip shopping center segment of the retail
haircare market, nor does it intend to refocus Supercuts into the enclosed
shopping mall segment of the retail haircare market in the United States.
Other than Puerto Rico, Supercuts has no international operations. The
Company may elect to grow the Supercuts division through international
expansion, but any such plans have not been finalized.

HIGH QUALITY HAIRCARE PRODUCTS. Through Trade Secret and the Company's other
salons, Regis sells nationally-recognized haircare products such as
Joico-Registered Trademark-, KMS-Registered Trademark-, Matrix-Registered
Trademark-, Paul Mitchell-Registered Trademark-, Nexxus-Registered
Trademark-, Redken-Registered Trademark- and Sebastian-Registered Trademark-
and a complete line of products sold under the Regis label, which is the
Company's best selling product line. The salon branded products are
typically sold only through professional salons and generate higher gross
margins than haircutting and other salon services. The Company's stylists
are trained to sell haircare products as well as services such as color
treatments and manicures to their customers. Sales of haircare products
increased nearly 25.5 percent in fiscal 1997 to $188 million and represented
27.3 percent of total revenue.

CONTROL OVER SALON OPERATIONS. Regis controls the quality of operations and
enjoys certain economies of scale in terms of certain central and store level
expenses. Quality control is particularly important in those salon divisions
where a greater portion of sales are derived from hairstyling services. The
Company has an extensive training program, including the production of
training videos for use in the salons, to ensure that hairstylists are
knowledgeable and provide consistent quality haircare services.

ECONOMIES OF SCALE. Management believes that due to its size and number of
locations the Company has certain advantages which are not available to
single location salons or small chains. The Company uses its point-of-sale
system to track inventory and to monitor service and product sales. This
product and customer information is used to evaluate salon productivity and,
in some cases, to determine the most appropriate salon use for the location.
Additionally, as a result of its volume purchases, the Company is able to
purchase haircare products and supplies and salon fixtures on an advantageous
basis. The Company is also able to gain national and local market
recognition for the Regis name and its salon concepts through national and
local advertising and promotional programs.

REGIS HAIRSTYLISTS

Regis Hairstylists are full-service salons providing complete haircare and
beauty services aimed at moderate to upscale, fashion-conscious consumers.
The customer mix at Regis Hairstylists salons is approximately 70 percent
women and 30 percent men. These salons offer a full range of custom
hairstyling, cutting, coloring, permanent wave and manicuring as well as
haircare products. The average sale at Regis Hairstylists salons is
approximately $20. Regis Hairstylists salons compete in their existing
markets primarily by emphasizing the high quality of full services provided.
The Company actively monitors the prices charged by its competitors in each
area and makes every effort to maintain prices which, although in the higher
range of local prices, are not so high as to be uncompetitive with prices of
other salons offering similar, high-quality services. At June 30, 1997, the
Company operated 811 Regis Hairstylists salons in shopping malls in North
America. Revenues from the Regis Hairstylists salons were $275 million, or
38.6 percent of the Company's total revenues, in fiscal 1997. The Company
expects to construct about 40 new Regis Hairstylists salons in fiscal 1998.

SUPERCUTS

The Supercuts concept is to provide consistent high quality haircare services
to its customers at convenient times and locations and at a reasonable price.
The services offered by Supercuts stores are limited and standardized. The
stores are designed for ease of operation and the demand for basic haircare
is believed to be recession resistant and non-seasonal. The Supercuts
concept appeals to men, women and children, although male customers account
for over 70 percent of total haircuts. Consumer research indicates that
males get their hair cut slightly more often (8-9 times annually) than
females (7-8 times annually) and their haircuts generally take less time.
Supercuts targets a male audience. At June 30, 1997, the Company operated
1,176 Supercuts salons in strip centers in North America, including 757
franchised locations. Revenues and income from company-owned Supercuts
salons and franchising activity was $96 million and $23 million,
respectively, or 16.6 percent of the Company's total revenues in fiscal 1997.
The Company expects to construct about 12 new company-owned and add about 55
franchised Supercuts stores in fiscal 1998.

MASTERCUTS FAMILY HAIRCUTTERS

MasterCuts Family Haircutters salons were introduced in 1985 to serve a
broader customer base than Regis Hairstylists and to respond to competitive
pressures for lower cost haircare services. MasterCuts salons emphasize
quality haircutting, lower prices and time-saving services for the entire
family. The customer mix at MasterCuts salons contains a greater percentage
of men and children than at Regis Hairstylists salons. MasterCuts salons
cater to walk-in customers and provide a warm, inviting atmosphere that is
comfortable for all members of the family. Many of the same product lines
sold in Regis Hairstylists salons are also available in MasterCuts salons.
The average sale at MasterCuts salons is approximately $10. The MasterCuts
salons place more emphasis on discount or promotional pricing for the
services being offered to compete more effectively with the chains of salons,
primarily franchises, now offering such services at discount prices. In
certain markets, the Company has been able to improve a salon's performance
by converting it to a MasterCuts salon. At June 30, 1997, the Company
operated 362 MasterCuts salons in North America. Revenues from MasterCuts
salons accounted for $95 million, or 13.3 percent of the Company's total
revenues, in fiscal 1997. During fiscal 1998, the Company plans to construct
approximately 50 new MasterCuts salons.

TRADE SECRET

Trade Secret salons emphasize haircare and beauty product sales in a retail
setting while providing high-quality haircare services. Trade Secret salons
are designed to display and attract sales of haircare and beauty products.
Trade Secret salons offer the same products as the Regis Hairstylists and
MasterCuts salons, but also have additional haircare items. The average sale
at Trade Secret salons is approximately $15. At June 30, 1997, the number of
Trade Secret salons totaled 340 in North America, including 38 franchised
locations. Revenues and income from company-owned Trade Secret salons and
franchising activity during fiscal 1997 was $91 million and $4 million,
respectively, or 13.3 percent of the Company's total revenues. The Company
anticipates constructing approximately 30 new Trade Secret salons in fiscal
1998.

WAL-MART SALONS

The Company expanded into the mass merchant retail arena in May 1996 by
acquiring 154 salons operating within Wal-Mart stores and supercenters.
Wal-Mart salons share many operating characteristics with MasterCuts: pricing
is promotional, services are focused on family hair cutting, and product
revenues contribute solidly to overall revenues. The Company operated 181
Wal-Mart salons at June 30, 1997. Revenue form Wal-Mart salons totaled $30
million, or 4.2 percent of the Company's total revenue. The Company
anticipates constructing about 50 new salons in Wal-Mart supercenters in
fiscal 1998.

INTERNATIONAL SALON OPERATIONS

The Company operated 423 hair care salons in eight countries outside of the
United States at June 30, 1997, including 352 salons in the United Kingdom.
Canadian salons operate under the Regis Hairstylists, MasterCuts and Trade
Secret tradenames, while salons in the remaining seven countries primarily
operate in department stores under license arrangements. Revenues from the
International salon operations were $99 million, or 13.9 percent of the
Company's total revenues, in fiscal 1997. The Company expects to continue to
modestly increase its International salon base in fiscal 1998.

NEW SALON DEVELOPMENT

The table on the following page sets forth the number of Company salons
opened at the beginning and end of each of the last five years, as well as
the number of salons opened, closed, relocated, converted and acquired during
each of these periods.

SALON LOCATION SUMMARY 1993 1994 1995 1996 1997
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REGIS
Open at beginning of period 815 802 801 787 797

Salons constructed 34 24 17 31 28
Acquired 6 9 9 18
Less: Relocations 13 11 11 11 10
--- --- --- --- ---
Net salon openings 21 19 15 29 36

Conversions (13) (3) (10) (4) (4)
Salons closed or sold (21) (17) (19) (15) (18)
--- --- --- --- ---

Open at end of period 802 801 787 797 811
--- --- --- --- ---
--- --- --- --- ---

SUPERCUTS
Company-Owned:
Open at beginning of period 48 185 326 464 507
Salons constructed 62 87 107 44 4
Acquired 27 16 1
--- --- --- --- ---

Net salon openings 137 272 449 509 511
Conversions (1) 48 59 21 9 (61)
Salon closed or sold - (5) (6) (11) (31)
--- --- --- --- ---

Open at end of period 185 326 464 507 419
--- --- --- --- ---
--- --- --- --- ---

Franchised Salons:
Open at beginning of period 649 646 617 629 661
Salons added 51 35 41 41 37
Acquired 3
--- --- --- --- ---

Net salon openings 700 681 658 673 698
Conversions (1) (48) (59) (21) (9) 61
Salon closed or sold (6) (5) (8) (3) (2)
--- --- --- --- ---

Open at end of period 646 617 629 661 757
--- --- --- --- ---
--- --- --- --- ---

MASTERCUTS
Open at beginning of period 185 229 257 283 327
Salons constructed 34 25 21 33 36
Acquired 3 1 12 2
Less: Relocations 1 3 2 3 3
--- --- --- --- ---
Net salon openings 33 25 20 42 35
Conversions 13 3 10 3 3
Salon closed or sold (2) (4) (1) (3)
--- --- --- --- ---

Open at end of period 229 257 283 327 362
--- --- --- --- ---
--- --- --- --- ---

1993 1994 1995 1996 1997
---- ---- ---- ---- ----

TRADE SECRET
Company-Owned:
Open at beginning of period 55 106 152 219
Salons constructed 22 28 40 56
Acquired 54 30 19 11 11
Less: Relocations 1 2 1 4 4
---- ---- ---- ---- ---
Net salon openings 55 50 46 47 63

Conversions (1) 1 2 20 24
Salon closed or sold (2) (4)
---- ---- ---- ---- ----

Open at end of period 55 106 152 219 302
---- ---- ---- ---- ----
---- ---- ---- ---- ----
Franchised Salons:
Open at beginning of period -0- 64 68 55
Salons added 1 7 8 6
Acquired 64
Less: Relocations 1
---- ---- ---- ---- ----
Net salon openings 65 7 7 6

Conversions (1) (1) (2) (19) (23)
Salon closed or sold (1) (1)
---- ---- ---- ---- ----

Open at end of period 0 64 68 55 38
---- ---- ---- ---- ----
---- ---- ---- ---- ----

WAL-MART
Open at beginning of period -0- 157
Salons constructed 3 24
Acquired 154
---- -----
Net salon openings 157 24

Open at end of period 157 181
---- ----
---- ----

INTERNATIONAL (2)
Open at beginning of period 199 225 251 244 408
Salons constructed 18 6 9 9 26
Acquired 21 27 2 178 3
Less: Relocations 4 1
---- ---- ---- ---- ----
Net salon openings 35 33 11 186 29

Salons closed or sold (9) (7) (18) (22) (14)
---- ---- ---- ---- ----

Open at end of period 225 251 244 408 423
---- ---- ---- ---- ----
---- ---- ---- ---- ----
Grand total, system-wide 2,142 2,422 2,627 3,131 3,293
---- ---- ---- ---- ----
---- ---- ---- ---- ----
Major remodelings & conversions 38 35 46 65 72
---- ---- ---- ---- ----
---- ---- ---- ---- ----

(1) Represents primarily the acquisition of franchise locations.
(2) Canadian salons are included in the Regis, MasterCuts and Trade Secret
sections and not included in the International salon totals.

Of the 174 new company-owned salons constructed in fiscal 1997, 28 were Regis
Hairstylists salons, 4 were Supercuts, 36 were MasterCuts, 56 were Trade Secret,
24 were Wal-Mart and 26 were International salons. The Company intends to
construct approximately 200 new company-owned salons during fiscal year 1998 and
expects that about 40 of these will be Regis Hairstylists salons, about 12 will
be Supercuts (in addition to about 55 new franchised locations), about 50 will
be MasterCuts, about 30 will be Trade Secret, about 50 will be Wal-Mart salons
and there will be a modest increase in International salons. The Company has a
program of modernizing its existing salons, ranging from redecoration to
substantial reconstruction, in order to raise its older salons to the standards
of its newly constructed locations. This program is implemented as management
determines that a particular location will benefit from such modernization, or
as required by lease renewals.

HAIRCARE PRODUCTS

In recent years, the Company has placed emphasis on the sales of higher-margin
haircare products, with the result that such revenues have become an
increasingly important part of the Company's business, having grown from 5.4
percent of total revenues in fiscal 1987 to 27.3 percent in fiscal 1997. A
significant portion of this growth has resulted from the introduction of
national brand merchandise in 1988 and the acquisition of Beauty Express in
November 1992 and Trade Secret in December 1993. The haircare products offered
are primarily shampoos, hair conditioners, fixatives and hair sprays. Regis
private label products, as well as lines of salon branded products, are sold
only through licensed beauty salons, including Joico-Registered Trademark-,
KMS-Registered Trademark-, Matrix-Registered Trademark-, Paul
Mitchell-Registered Trademark-, Nexxus-Registered Trademark-, Redken-Registered
Trademark- and Sebastian-Registered Trademark-. The Regis line continues to be
the Company's best selling product line. The Company actively reviews its
product line offerings and continuously investigates the quality and sales
potential of new products. The Company utilizes its national salon network as a
testing ground for new product formulations. There are many potential sources
of supply for the types of products used or sold at the salons, and the Company
is not dependent upon any single supplier.

SITE SELECTION

The Company is the largest shopping mall tenant which operates haircare salons
in the United States and has attained national tenant status which makes the
Company an attractive tenant for shopping mall owners and developers. In the
United States, there are approximately 1,800 enclosed malls which meet the
Company's performance criteria with several new shopping malls developed each
year. At June 30, 1997, the Company's 1,513 United States and Canadian
mall-based salons were located in approximately 1,011 shopping malls. Because
the Company's different salon concepts target different customer groups
depending on the size and location of the shopping malls, more than one of the
Company's salon concepts may be located in the same mall. As a result, there
are numerous leasing opportunities in shopping malls for its Regis Hairstylists,
MasterCuts and Trade Secret salons, of which the Company has penetrated less
than fifty percent.

The Company generally locates its Regis, MasterCuts and Trade Secret salons in
fully enclosed, climate-controlled shopping malls classified as "regional"
having 400,000 or more square feet of leasable area and at least two full-line
department store anchor tenants. The Company's experience has been that
selecting the proper mall and obtaining a favorable, high-traffic location
within the mall are important determinants of the success of a new salon. For
existing malls, the Company evaluates the current sales per square foot of
tenants, the stature and strength of the anchor tenants and the other tenants,
the location and traffic patterns within the mall, and the proximity of
competitors. In addition, the Company may conduct site surveys and physical
observations to assess the location and competitive environment.

Several trends have enabled the Company to continue to lease high-profile space
in existing malls. Leasing velocity and turnover have increased because the
average length of shopping mall lease terms has been steadily declining. Also,
many larger tenants are downsizing their leased areas to make better use of
costly space, thereby creating available floor space. Also, many existing malls
are being expanded, renovated and remerchandised. Because of these factors, the
Company believes that it has ample expansion opportunities and therefore can be
selective in establishing new locations.

In evaluating specific locations for Supercuts Company-owned and franchise
stores, the Company seeks conveniently located, highly visible strip shopping
centers which allows customers adequate parking and quick and easy store access.
The Company believes strip shopping centers anchored by the number one or two
grocery chain in the specific market, or a major mass merchant, provide a
profitable customer flow. Supercuts' customers are destination shoppers and, as
a result, Supercuts is not dependent upon expensive regional shopping mall
locations. Various other factors are considered in evaluating sites, including
trade area demographics, availability and cost of space, location of
competitors, traffic count, visibility, signage and other leasehold factors in a
given center or area. All franchisee sites must be approved by the Company.

SUPERCUTS FRANCHISING PROGRAM

GENERAL

The Company provides its Supercuts franchisees with a comprehensive system of
business training, stylist education, site approval and lease negotiation,
professional marketing, promotion and advertising programs, and other forms of
support designed to help the franchisee build a successful business. The
Company employs field staff personnel to assist franchisees in all aspects of
operations, training and supervision.

STANDARDS OF OPERATIONS

All Supercuts franchisees are required to conform to Company-established
operational policies and procedures relating to quality of service, training,
design and decor of stores, and trademark usage. The Company's field personnel
make periodic visits to franchised stores to ensure that the stores are
operating in conformity with Supercuts standards. In addition, to further
ensure such conformity, the Company enters into the lease for the store site
directly with the landlord, and subsequently subleases the site to the
franchisee. The sublease provides the Company with the right to terminate the
sublease and gain possession of the store if the franchisee fails to comply with
the Company's operational policies and procedures. See Note 6 of "Notes to the
consolidated Financial Statements" for further information.

FRANCHISE SALES

Franchisee expansion is now being encouraged and will continue to be a
significant focus of the Company in the future. Existing franchisees and new
franchisees who open more than one salon receive a reduction in franchise fees.

FRANCHISEE TRAINING

The Company provides new Supercuts franchisees with training, focusing on the
various aspects of store management, including operations, personnel management,
marketing fundamentals and financial controls. Existing franchisees receive
training, counseling and information from the Company on a continuous basis.
The mechanisms include mail, "800" number information lines and E-mail. In
addition, the Company provides store managers and stylists with extensive
training. For a further description of the Company's education and training
programs, see "Education and Training" below.

FRANCHISE TERMS

Supercuts franchisees currently pay a monthly royalty to the Company of 10
percent of a store's service revenues and 4 percent of a store's product
revenues. In addition, franchisees pay an advertising fee of 5 percent of
service revenues, which is held in a separate account and administered by the
Company. In calendar 1996, franchisees contributed approximately $10 million
to the advertising fund. All royalties and advertising fees are due monthly.
For franchise locations opened between the period July 1, 1996 and June 30,
1997 franchisees may choose either (i) a sliding scale service royalty fee,
based on monthly revenues combined with the standard 4% product royalty fee
or (ii) a combined service and product royalty fee of 6 percent. For
franchise locations opened on or after July 1, 1997 the royalty fee is 6
percent of combined service and product revenues.

Beginning July 1, 1996, franchise fees for existing franchisees are $10,000 per
salon. Franchise fees for a franchisee's initial location are $22,500.
Franchisees are responsible for the costs of leasehold improvements, furniture,
fixtures, equipment, supplies, inventory and certain other items, including
initial working capital. New franchisees also must pay an initial fee of $5,000
for franchisee training.

The existing franchise agreements have an initial term of 10 years with the
option by the franchisee to renew for one additional ten-year period. Upon
renewal, franchisees pay a renewal fee of 4 percent of the franchisee's total
store revenues for the prior 12 months. During fiscal 1997, all agreements
eligible for renewal were renewed. The agreements also provide the Company a
right of first refusal if the store is to be sold. The franchisee must obtain
the Company's approval in all instances where there is a sale of the franchise.
The current franchise agreement is site specific and does not provide any
territorial protection to a franchisee, although some older franchise agreements
do include limited territorial protection. The Company has a comprehensive
impact policy that resolves potential conflicts among franchisees and/or the
Company regarding proposed salon sites.

The term of the new franchise agreement, which existing franchises may convert
to, runs without limitation provided the right to possession of the location
does not expire or is not terminated and further provided the franchise
agreement is not terminated. The new franchise agreement does not provide for a
renewal fee but rather requires a $30,000 investment (in 1997 dollars) every ten
years.

MARKETS AND MARKETING

Approximately half of the Company's North American salons are situated in
"middle markets" with service area populations between 80,000 and 800,000.
Approximately one-fourth of the Company's salons are located in smaller markets
with a service area population below 80,000, and about one-fourth are located in
major metropolitan areas with populations in excess of 800,000. The Company
believes that the geographic dispersion of its salons throughout the United
States may diminish the impact of fluctuations in regional business cycles.

The Company maintains various advertising, sales and promotion programs for its
salons, budgeting a predetermined percent of revenues for such programs. The
Company has developed promotional tactics and institutional sales messages for
each of its divisions targeting certain customer types and positioning each
concept in the marketplace. Print, radio and television and billboard
advertising are developed and supervised at the Company's headquarters, but most
advertising is done in the immediate area of the particular salon. The Company
has conducted institutional advertising and public relations on a national basis
through such magazines as SEVENTEEN, PEOPLE and VOGUE. In addition, the Company
conducts seasonal sales promotions in the winter (Christmas merchandising) and
late summer (back-to-school).

Supercuts maintains an Advertising Fund (the "Fund") that provides
comprehensive advertising and sales promotion support for the Supercuts
system. All Supercuts stores, Company-owned and franchised, contribute 5
percent of service revenues to the Fund, 80 percent of which is allocated to
the contributing market for media placement and local marketing activities
and 20 percent of which is allocated for national advertising campaigns and
system-wide activities. Each new franchised salon opened by a new franchisee
or by an existing franchisee in a new market, contributes $5,000 for grand
opening expenses. Additionally, salons may contribute supplemental funds to
pay for advertising costs above their total market contributions. The
Company's marketing department develops and administers (at no additional
cost to the franchisees or the Fund) system-wide advertising and promotion.
Market research suggests that customers have a high loyalty to their haircare
providers such as Supercuts. This intensive advertising program creates
significant consumer awareness, a strong brand image and high loyalty. In
calendar 1996, $14.3 million was paid into the Fund, by both franchised and
Company-owned Supercuts stores.

Supercuts conducts regular, system-wide promotional programs for markets and an
initial grand opening program for new stores. Each includes broadcast, print,
direct mail and public relations campaigns.

The Company's salons also support charitable events. In the annual "Clip for
the Cure," many Regis salons worldwide offer haircuts for $10 and all proceeds
are donated to the Company's Foundation for Breast Cancer Research which donates
money to organizations researching a cure for breast cancer. The Company has
reached nearly $2.0 million in fundraising for breast cancer charities.

SALON TRAINING PROGRAMS

The Company has an extensive hands-on training program for its salon managers
and hairstylist associates which emphasizes both technical training in
hairstyling and cutting, perming, hair coloring and hair treatment regimes as
well as customer service and product sales. The objective of the training
programs is to ensure that customers receive professional and quality service
which the Company believes will result in more repeat customers, referrals and
product sales.

The Company has full- and part-time artistic directors who teach and train the
salon operators in techniques for providing the salon services and who instruct
the stylists in current styling trends. The Company also has an audiovisual
based training system in its salons designed to enhance technical skills of
hairstylists.

The Company has a customer service training program to improve the interaction
between employees and customers. Staff members are trained in the proper
techniques of customer greeting, telephone courtesy and professional behavior
through a series of professionally designed video tapes and instructional
seminars.

Supercuts provides extensive initial and ongoing training to stylists through
its system of field educators. Every stylist must attend a training course at
one of the Supercuts designated training centers at which they are taught the
Supercuts' haircutting technique and customer service principles. Stylists must
be recertified every 6 to 9 months.

STAFF RECRUITING AND RETENTION

Recruiting quality managers and hairstylists is essential to the establishment
and operation of successful salons. The Company's supervisory team seeks to
recruit entrepreneurial salon managers who display initiative and imagination.
The Company has been successful in recruiting capable managers and stylists for
a number of reasons. To employ and retain qualified and productive employees,
the Company utilizes a broad compensation system including cash incentives,
merchandise awards, Company-sponsored trips and benefit programs. The Company
believes that its compensation structure for salon managers and hairstylists is
competitive within the industry. Stylists benefit from the Company's
high-traffic locations in quality malls, as well as name-recognition from
Supercuts, and receive a steady source of new business from walk-in customers.
In addition, the Company offers a career path with the opportunity to move into
managerial and training positions within the Company.

SALON DESIGN

The Company's salons are designed, built and operated in accordance with uniform
standards and practices developed by the Company based on its experience. New
salons are designed and constructed according to the Company's standard
specifications, thereby reducing design and construction costs and enhancing
operating efficiencies. Salon fixtures and equipment are also uniform, allowing
the Company to place large orders for these items with attendant cost savings.

The size of the Company's salons ranges from 500 to 2,300 square feet, with the
typical salon having about 1,100 square feet. At present, the cost to the
Company of constructing and furnishing a new salon, including inventories,
averages in the range of approximately $80,000 to $145,000, with about 80
percent of the total construction cost for leasehold improvements and the
balance for salon fixtures, equipment, and inventory.

The Company maintains its own construction and design department, and designs
and supervises the construction, furnishing and fixturing of all new salons.
The Company has developed considerable expertise in designing upscale, visually
appealing salons. The design and construction staff focuses on aesthetic
appeal, efficient use of space, cost and rapid completion times. The Company's
salons are airy in appearance with open store fronts and have few, if any,
partitions. Haircare products offered for sale are prominently and attractively
displayed in the salons. Each of the Company's salon concepts has a different
design related to the image to be projected. Regis Hairstylists salons are more
upscale in design and utilize marble floors, mirrors and contrasting black and
white colors. Supercuts salons are functional in design and tastefully
furnished, consistent with its image of a quality provider of affordable
haircutting services. MasterCuts salons are family oriented and include
extensive use of woodwork and warm, comfortable colors. Trade Secret salons use
many of the same design techniques as Regis Hairstylists salons, and also have
open and easily accessible product displays. Wal-Mart salons, which are
strategically located near the check out counters in the front of Wal-Mart
stores and supercenters, are efficiently designed and tastefully furnished to
complement the Wal-Mart retail environment.

OPERATIONS

Company-owned and franchised salons located in the United States, Puerto Rico,
Canada, and Mexico are operated and managed as part of the Company's North
American operations. All other salons, located in department stores in the
United Kingdom, South Africa, Switzerland, Ireland, France and the United Arab
Emirates are operated and managed through the Company's United Kingdom
subsidiary.

For each salon division, the Company's operations are divided into geographic
regions throughout the United States. Each region is headed by one of the
Company's salon directors, assisted by regional field managers and area
supervisors, who coordinate the operations of the salons in the particular
region. The area supervisors are responsible for hiring and training the
managers for each salon.

Over the years the Company has developed uniform procedures for opening new
salons in such a manner as to maximize revenues from a new location as rapidly
as possible. After opening, all salons are operated according to standard
procedures which the Company has learned are desirable for the operation of an
efficient, high-quality, profitable salon.

MANAGEMENT INFORMATION SYSTEMS

The Company utilizes a retail point-of-sale information system in all its
salons. This system collects data daily from each salon and consolidates the
data into several management reports. The Company's automated system polls
terminals nightly and all salon cash receipts are transferred automatically into
a centralized bank account, thereby significantly reducing administrative
expenses. Point-of-sale information is also used both to monitor salon
performance and to generate customer data for use in identifying and
anticipating industry trends for purposes of pricing and marketing. The Company
has expanded the system to deliver on-line information as to sales of products
to improve its inventory and control system, including suggested monthly product
purchase recommendations for a salon, a monthly report of sales and a perpetual
inventory. Management believes that its information systems provide advantages
in planning and analysis which are not available to a majority of its
competitors which do not have management information systems.

COMPETITION

The haircare industry is highly competitive. In every area in which the Company
has a salon, there are competitors offering similar haircare services and
products at similar prices. The Company faces competition within malls from
companies which operate salons as departments within department stores and from
smaller chains of salons, independently owned salons and, to a lesser extent,
salons which, although independently owned, are operating under franchises from
a franchising company that may assist such salons in areas of training,
marketing and advertising.

Significant entry barriers exist for new chains due to the need to establish
brand identification, systems and infrastructure, recruitment of experienced
haircare management and adequate store staff, and leasing of quality sites.
The principal factors of competition in the affordable haircare category are
quality, consistency and convenience. The Company continually strives to
improve its performance in each of these areas and to create additional
points of difference versus the competition.

In order to obtain locations in shopping malls, the Company must be competitive
as to rentals and other customary tenant obligations. The Company believes that
because of its established relationships with many leading shopping center
developers throughout the country, its status in the haircare industry as a
national rather than a local tenant, and its financial resources, it will
encounter little difficulty in obtaining sufficient shopping center locations to
continue its historical pattern of growth.

TRADEMARKS

The Company holds numerous trademarks, both in the United States and in several
foreign countries. The most important are the trademarks "Regis Hairstylists,"
"Supercuts," "MasterCuts" and "Trade Secret."

The Company believes the use of these trademarks is important in establishing
and maintaining its reputation as a national operator of high-quality
hairstyling salons, and is committed to protecting these trademarks by
vigorously challenging any unauthorized use.

EMPLOYEES

As of June 30, 1997, the Company had approximately 25,000 full- and part-time
employees worldwide, of which approximately 21,000 employees were located in the
United States. None of the Company's employees is subject to a collective
bargaining agreement and the Company believes that its employee relations are
good.

GOVERNMENTAL REGULATIONS

The Company is subject to various federal, state and local laws affecting its
business as well as a variety of regulatory provisions relating to the conduct
of its cosmetology business., including health and safety. As a franchisor, the
Company's franchise operations are subject to the Federal Trade Commission's
Trade Regulation Rule on Franchising (the "FTC Rule") and by state laws and
administrative regulations that regulate various aspects of franchise operations
and sales. The Company's franchises are offered to franchisees by means of an
offering circular containing specified disclosures in accordance with the FTC
Rule and the laws and regulations of certain states. The Company has registered
its offering of franchises with the regulatory authorities of those states in
which it offers franchises and in which such registration is required. State
laws that regulate the franchisor-franchisee relationship presently exist in a
substantial number of states and, in certain cases, apply substantive standards
to this relationship. Such laws may, for example, require that the franchisor
deal with the franchisee in good faith, may prohibit interference with the right
of free association among franchisees, and may limit termination of franchisees
without payment of reasonable compensation. The Company believes that the
current trend is for government regulation of franchising to increase over time.
However, such laws have not had, and the Company does not expect such laws to
have, a significant effect on the Company's operations.

The Company believes it is operating in substantial compliance with applicable
laws and regulations governing operations.

ITEM 1a. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding the Directors of the Company and Exchange Act Section
16(a) filings is included on pages 3 and 4 of the Registrant's Proxy Statement
dated September 16, 1997, and is incorporated herein by reference.

Information relating to Executive Officers of the Company follows:

Name Age Position
- ------------------- --- -----------------------------------------------

Myron Kunin 68 Chairman of the Board of Directors

Paul D. Finkelstein 55 President, Chief Executive Officer and Director

Christopher A. Fox 47 Executive Vice President and Director

Frank E. Evangelist 60 Senior Vice President, Finance, Secretary and
Director

William E. Halfacre 56 Senior Vice President, Retail and Purchasing

Bruce Johnson 44 Senior Vice President, Design and Construction

Mark Kartarik 41 Senior Vice President, Operations

Gordon Nelson 46 Senior Vice President, Fashion and Education

Anthony W.E. Rammelt 60 Senior Vice President, International

Bert M. Gross 67 Senior Vice President, General Counsel

Myron Kunin has served as Chairman of the Board of Directors of the Company
since 1983, as Chief Executive Officer of the Company from 1965 until July 1,
1996, as President of the Company from 1965 to 1987, and as a director of the
Company since its formation in 1954. He is also President, Chairman of the
Board and holder of the majority voting power of Curtis Squire, Inc., the
Company's principal shareholder. He is also a director of Nortech Systems
Incorporated, and The Cerplex Group, Inc.

Paul D. Finkelstein has served as President, Chief Operating Officer and as a
director of the Company since December 1987, as Executive Vice President of the
Company from June 1987 to December 1987, and has served as Chief Executive
Officer since July 1, 1996.

Christopher A. Fox was elected Executive Vice President in 1994, was Senior Vice
President, Real Estate of the Company from 1988 to 1994, as Vice President from
1984 to 1988, and has served as a director of the Company since 1989.

Frank E. Evangelist has served as Senior Vice President, Finance of the Company
since 1988, as Treasurer of the Company from 1968 to 1988, and as Secretary and
as a director of the Company since 1986.

William E. Halfacre has served as Senior Vice President, Retail and Purchasing
of the Company since 1993, and as Vice President from 1990 to 1993.

Bruce Johnson was elected a Senior Vice President of Design and Construction in
1997, and has served as Vice President from 1988 to 1997.

Mark Kartarik has served as Senior Vice President, Operations of the Company
since 1994, and as Vice President from 1989 to 1994. He was elected COO of
Supercuts, Inc. in 1997.

Gordon Nelson has served as Senior Vice President, Fashion and Education of the
Company since 1994, and as Vice President from 1989 to 1994.

Anthony W. E. Rammelt has served as Senior Vice President, International of the
Company since 1994, and as Vice President from 1993 to 1994.

Bert M. Gross was elected Senior Vice President, General Counsel in 1997, and
acted as outside legal counsel to the Company from 1957 to 1997.

ITEM 2. PROPERTIES

The Company's corporate executive and administrative offices are headquartered
in a 100,000 square foot building in Edina, Minnesota owned by the Company.

The Company also leases warehouse space in Eden Prairie, Minnesota for storing
and distributing inventory. The Company is in the process of constructing a new
distribution center in Chattanooga, Tennessee scheduled to be completed during
fiscal 1998. The Company believes that these spaces will be adequate for
inventory storage needs for the near future.

The Company operates all of its salon locations under leases or licenses. All
of its North American locations opened in regional malls during the past five
years are operating under leases with an original term of at least ten years.
Salons operating within Wal-Mart stores and supercenters have leases with
original terms of at least five years. Salons in the U.K. operations which are
located in department stores operate under license agreements with the host
department stores.

The Company also leases the premises in which the majority of its franchisees
operate and has entered into corresponding sublease arrangements with the
franchisees. These leases, generally with terms of approximately 5 years, are
expected to be renewed on expiration. Future minimum lease payments for the next
5 years, which are reimbursable from the franchisees, are approximately
$15,000,000 annually. All additional lease costs are passed through to the
franchisees.

None of the Company's salon leases is individually material to the operations of
the Company, and the Company expects that it will be able to renew its leases on
satisfactory terms as they expire. See Note 6 of "Notes to the Consolidated
Financial Statements".

ITEM 3. LEGAL PROCEEDINGS

During fiscal 1997, the Company resolved the litigation brought by David E.
Lipson and DEL Holding Corporation (DEL), a corporation controlled by Mr.
Lipson, against the Company's wholly-owned Supercuts subsidiary. Mr. Lipson and
DEL had brought legal action against Supercuts and certain Supercuts directors
and officers seeking damages allegedly due to Mr. Lipson and DEL pursuant to a
consulting agreement between DEL and Supercuts, further damages allegedly
sustained by Mr. Lipson as a result of a delay in his ability to sell certain
shares of Supercuts common stock, and for alleged defamation. Mr. Lipson had
also brought legal action in the Delaware Chancery Court to require Supercuts to
indemnify him for expenses incurred by him in connection with an SEC
investigation into his trading of Supercuts stock in March and April of 1995.
The Delaware Court had ruled that Mr. Lipson was entitled to an advance of
certain expenses incurred by him, but did not establish the amount of the
advancement. The Company paid Mr. Lipson and DEL $6.7 million in complete
settlement of all claims of Mr. Lipson, DEL or any other entity controlled by
Mr. Lipson.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

a. On October 23, 1996, the Company held a special meeting of
shareholders. The purpose of the meeting was to approve the issuance by
the Company of up to 4,920,590 shares of the Company's common stock in
connection with the proposed merger of RGIS Merger Corp., a
wholly-owned subsidiary of the Company, into Supercuts, Inc., and the
conversion of each outstanding share of Supercuts' common stock into
the right to receive 0.40 shares of the Company's common stock pursuant
to an agreement and plan of merger dated as of July 14, 1996. At the
meeting, 14,441,339 shares of the Company stock was voted in favor of
the merger and 208,463 shares voted against the merger.

b. On November 12, 1996, at the annual meeting of the shareholders of the
Company, the shareholders approved an increase in the authorized shares
of common stock of the Company from 25,000,000 to 50,000,000.
16,086,395 shares were voted in favor of the proposal and no shares
were voted against the proposal.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

Data relating to Market Stock Data Information and dividends as set
forth in the sections included on Page 36 of the Registrant's 1997
Annual Report to Shareholders, a copy of which is included as Exhibit
13 hereto, are incorporated herein by reference.

As of June 30, 1997, Regis shares were owned by approximately 12,000
shareholders based on the number of record holders and an estimate of
individual participants in security position listings.

ITEM 6. SELECTED FINANCIAL DATA

Five-Year Summary of Selected Financial Data which is included on page
16 of the Registrant's 1997 Annual Report to Shareholders, a copy of
which is included as Exhibit 13 hereto, is incorporated herein by
reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Results of Operations and
Financial Condition of the Company on pages 17 to 21 of the
Registrant's 1997 Annual Report to Shareholders, a copy of which is
included as Exhibit 13 hereto, is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Report of Independent Accountants on page 35, the Consolidated
Financial Statements on pages 22 to 35 and the Quarterly Financial
Data on page 36 of the Registrant's 1997 Annual Report to
Shareholders, a copy of which is included as Exhibit 13 hereto, are
incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

See Part I for information regarding Directors and Executive Officers
of the Registrant.

ITEM 11. EXECUTIVE COMPENSATION

Executive compensation included on pages 6 through 8 of the
Registrant's Proxy Statement dated September 16, 1997 is incorporated
herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial owners and Management on page
13 of the Registrant's Proxy Statement dated September 16, 1997 is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information regarding certain relationships and related transactions is
included on page 12 of the Registrant's Proxy Statement dated September
16, 1997 and is incorporated herein by reference.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) (1). The following Consolidated Financial Statements of Regis
Corporation, and the Report of Independent Accountants
thereon, included on pages 22 to 35 of the Registrant's 1997
Annual Report to Shareholders, are incorporated by reference
in Item 8:

Report of Independent Accountants
Consolidated Balance Sheet as of June 30, 1997 and 1996
Consolidated Statement of Operations
for the years ended June 30, 1997, 1996 and 1995
Consolidated Statements of Changes in Shareholders' Equity
for the years ended June 30, 1997, 1996 and 1995
Consolidated Statement of Cash Flows
for the years ended June 30, 1997, 1996 and 1995
Notes to Consolidated Financial Statements

(2). The financial statement schedule required to be filed by Item 8
of this form is as follows:

Report of Independent Accountants on Financial Statement
Schedule
Schedule II -- Valuation and Qualifying Accounts
as of June 30, 1997, 1996 and 1995

All other schedules are inapplicable to the Registrant, or
equivalent information has been included in the consolidated
financial statements or the notes thereto, and have therefore
been excluded.

(3). Listing of Exhibits:

EXHIBIT NUMBER

3(a) Election of the registrant to become governed by Minnesota Statutes
Chapter 302A and Restated Articles of Incorporation of the registrant,
dated March 11, 1983; Articles of Amendment to Restated Articles of
Incorporation, dated October 29, 1984; Articles of Amendment to Restated
Articles of Incorporation, dated August 14, 1987; Articles of Amendment
to Restated Articles of Incorporation, dated October 21, 1987. (Filed as
Exhibit 3(a) to the Registrant's Registration Statement on Form S-1 (Reg.
No. 40142) and incorporated herein by reference.)

3(b) By-Laws of the registrant. (Filed as Exhibit 3(c) to the Registrant's
Registration Statement on Form S-1 (Reg. No. 40142) and incorporated
herein by reference.)

4(a) Three-for-two stock split. (Incorporated by reference to Exhibit A to May
2, 1996, Form 8-K.)

4(b) Shareholder Rights Agreement dated December 23, 1996 (Incorporated by
reference to Exhibit 4 of the Company's report on Form 8-A12G dated
February 4, 1997)

10(a) Employment and Deferred Compensation Agreement, Dated August 30, 1995,
between the Company and Paul D. Finkelstein.

10(b) Form of Employment and Deferred Compensation Agreement between the
Company and six executive officers.

10(c) Northwestern Mutual Life Insurance Company Policy Number 10327324, dated
June 1, 1987, face amount $400,000 owned by the registrant, insuring the
life of Paul D. Finkelstein and providing for division of death proceeds
between the registrant and the insured's designated beneficiary
(split-dollar plan). (Filed as Exhibit 10(g) to the Registrant's
Registration Statement on Form S-1 (Reg. No. 40142) and incorporated
herein by reference.)

10(d) Schedule of omitted split-dollar insurance policies. (Filed as Exhibit
10(h) to the Registrant's Registration Statement on Form S-1 (Reg. No.
40142) and incorporated herein by reference.)

10(e) Note Agreement dated as of June 21, 1991 between the registrant and The
Prudential Insurance Company of America (Incorporated by reference to
Exhibit 10(o) as part of the Company's Report on 10-K dated September 26,
1991 for the year ended June 30, 1991).

10(f) Employee Stock Ownership Plan and Trust Agreement dated as of May 15,
1992 between the registrant and Myron Kunin and Paul D. Finkelstein,
Trustees (Incorporated by reference to Exhibit 10(q) as part of the
Company's Report on 10-K dated September 27, 1993 for the year ended June
30, 1993).

10(g) Executive Stock Award Plan and Trust Agreement dated as of July 1, 1992
between the registrant and Myron Kunin, Trustee (Incorporated by
reference to Exhibit 10(r) as part of the Company's Report on 10-K dated
September 27, 1993 for the year ended June 30, 1993).

10(h) Revolving Credit Agreement as of June 21, 1994 between the registrant and
LaSalle National Bank and Bank Hapoalim. (Incorporated by reference to
Exhibit 10(r) part of the Company's report on 10-K dated September 28,
1994 for the year ended June 30, 1994.)

10(i) Employee Profit Sharing Plan and Trust agreement, amended June 22, 1994
between the registrant and Myron Kunin, Trustee. (Incorporated by
reference to Exhibit 10(t) part of the Company's report on 10-K dated
September 28, 1994 for the year ended June 30, 1994.)

10(j) Survivor benefit agreement dated June 27, 1994 between the Company and
Myron Kunin. (Incorporated by reference to Exhibit 10(t) part of the
Company's report on 10-K dated September 28, 1994 for the year ended June
30, 1994.)

10(k) Modification to Revolving Credit Agreement in 10(h) dated July 20, 1995.
(Incorporated by reference to Exhibit 10(n) part of the Company's report
on 10-K dated September 27, 1995 for the year ended June 30, 1995.)

10(l) Modification of Note Agreement in 10(e) dated July 21, 1995.
(Incorporated by reference to Exhibit 10(g) part of the Company's report
on 10-K dated September 27, 1995 for the year ended June 30, 1995.)

10(m) Private Shelf Agreement dated as of July 25, 1995 between the registrant
and the Prudential Insurance Company of America.

10(n) Agreements for Sale and Purchase dated as of December 29, 1995, between
the Company and Steiner Salons Limited and Steiner Hairdressing Limited.
(Incorporated by reference to Exhibit 10(r) of the Company's report on
10-Q dated February 13, 1996, for the quarter ended December 31, 1995.)

10(o) Series A Senior Note drawn from Private Shelf Agreement dated as of
February 21, 1996, between the registrant and the Prudential Insurance
Company of America. (Incorporated by reference to Exhibit 10(s) of the
Company's report on 10-Q dated May 3, 1996, for the quarter ended March
31, 1996.)

10(p) Modification to Revolving Credit agreement in 10(k) dated March 19, 1996.
(Incorporated by reference to Exhibit 10(t) of the Company's report on
10-Q dated May 3, 1996, for the quarter ended March 31, 1996.)

10(q) Asset purchase agreement between the Company and National Hair Care
Centers LLC. (Incorporated by reference to Exhibit B to May 9, 1996,
Form 8-K.)

10(r) Series B Senior Note drawn from Private Shelf Agreement dated as of June
10, 1996, between the registrant and the Prudential Insurance Company of
America. (Incorporated by reference to Exhibit 10(v) of the Company's
report on 10-K dated September 16, 1996, for the year ended June 30,
1996.)

10(s) Modification to Revolving Credit agreement in 10(p) dated July 9, 1996.
(Incorporated by reference to Exhibit 10(w) of the Company's report on
10-K dated September 16, 1996, for the year ended June 30, 1996.)

10(t) Agreement and plan of merger between the Company and Supercuts, Inc.
(Incorporated by reference to Exhibit 2.1 to July 15, 1996, Form 8-K.)

10(u) Series C Senior Note drawn from Private Shelf Agreement dated as of
October 28, 1996, between the registrant and the Prudential Insurance
Company of America. (Incorporated by reference to Exhibit 10(x) of the
Company's report on 10-Q dated November 5, 1996, for the quarter ended
September 30, 1996.)

10(v) Term Note A Agreement between the registrant and LaSalle National Bank
dated October 28, 1996. (Incorporated by reference to Exhibit 10(y) of
the Company's report on 10-Q dated November 5, 1996, for the quarter
ended September 30, 1996)

10(w) Series D Senior Note drawn from Private Shelf Agreement dated as of
December 13, 1996, between the registrant and the Prudential Insurance
Company of America.

10(x) Modification to Revolving Credit agreement in 10(s) dated March 19,
1997.

10(y) Series E Senior Note drawn from Private Shelf Agreement dated as of
April 7, 1997, between the registrant and the Prudential Insurance
Company of America.

10(z) Compensation and non-competition agreement dated May 7, 1997, between
the Company and Myron Kunin.

10(aa) Term Note B Agreement between the registrant and LaSalle National Bank
dated July 11, 1997.

10(bb) Modification of Private Shelf Agreement in 10(m) dated July 11, 1997.

10(cc) Series F Senior Note drawn from Private Shelf Agreement dated as of
July 28, 1997, between the registrant and the Prudential Insurance
Company of America.

11 Computation of earnings per share.

13 Select pages of the 1997 Annual Report to Shareholders.

23 Consent of Independent Accountants.

27 Financial Data Schedule

(b) REPORTS ON FORM 8-K.

The following reports on Form 8-K were filed during and subsequent to the
last quarter of the period covered by this report:

Form 8-K dated May 14, 1997 related to the restatement of the
Registrant's Form 10-K Annual Report for the year ended June 30, 1996
and the restatement of the Registrants Form 10-Q for the quarter ended
September 30, 1996, restated to reflect the merger with Supercuts,
Inc. that occurred on October 25, 1996. The merger was accounted for
as a pooling-of-interests.

Form 8-K/A dated May 15, 1997 amending Form 8-K dated May 14, 1997.

Form 8-K/A, Amendment No. 2, dated May 19, 1997 amending Form 8-K
dated May 14, 1997.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

REGIS CORPORATION

By /s/ Myron Kunin
-------------------------------------
Myron Kunin, Chairman of the Board of Directors

By /s/ Frank E. Evangelist
-------------------------------------
Frank E. Evangelist, Sr. Vice President, Finance/Secretary
(Principal Financial and Accounting Officer)

DATE: September 24, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

/s/ Myron Kunin
-------------------------------------
Myron Kunin, Chairman of the
Board of Directors

/s/ Paul D. Finkelstein
-------------------------------------
Paul D. Finkelstein, Director

/s/ Frank E. Evangelist
-------------------------------------
Frank E. Evangelist, Director

/s/ Christopher A. Fox
-------------------------------------
Christopher A. Fox, Director

/s/ David Kunin
-------------------------------------
David Kunin, Director

/s/ Rolf F. Bjelland
-------------------------------------
Rolf F. Bjelland, Director

/s/ Van Zandt Hawn
-------------------------------------
Van Zandt Hawn, Director

/s/ Susan Hoyt
-------------------------------------
Susan Hoyt, Director

/s/ Tom Gregory
-------------------------------------
Tom Gregory, Director

REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE

To the Shareholders and Directors of
Regis Corporation:

Our report on the consolidated financial statements of Regis Corporation
has been incorporated by reference in this Form 10-K from page 35 of the 1997
Annual Report to Shareholders of Regis Corporation. In connection with our
audits of such financial statements, we have also audited the related financial
statement schedule listed in Item 14(a)(2) of this Form 10-K.

In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

COOPERS & LYBRAND L.L.P.

Minneapolis, Minnesota
August 22, 1997

REGIS CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
as of June 30, 1997, 1996 and 1995
(dollars in thousands)

Column A Column B Column C Column D Column E
-------- -------- ---------------------------- ---------- ----------
Balance at Charged to Balance at
beginning costs and Charged to end of
Description of period expenses Other Accounts Deductions period
- ----------- --------- --------- -------------- ---------- ---------

JUNE 30, 1997:
Valuation Account, Receivable from MEI Salons $3,800 $901(1) $2,899
Valuation Account, Receivable from GEMM, Inc. $500 $500
Valuation Account, Allowance for doubtful accounts $344 $236 $380 $200

JUNE 30, 1996:
Valuation Account, Receivable from GEMM, Inc. $4,500 $700(1) $3,800
Valuation Account, GEMM, Inc. Preferred Stock $500 $500
Valuation Account, Allowance for doubtful accounts $73 $360 $89 $344

JUNE 30, 1995:
Valuation Account, Receivable from GEMM, Inc. $2,850 $1,650(2) $4,500
Valuation Account, GEMM, Inc. Preferred Stock -0- $500 $500
Valuation Account, Allowance for doubtful accounts $159 $33 $119 $73

Notes:
- ------
(1) Payments received on previously written off balance.
(2) Charge associated with advance to GEMM, Inc.