Trade Secret, Inc.
Trade Secret, Inc. (‘Trade Secret’ or the ‘Company’) is a leading operator of beauty salons throughout the United States and Puerto Rico. Prior to filing for Chapter 11, the Company operated nearly 612 beauty salons in shopping malls and strip centers. The Company’s salons offer one of the most comprehensive assortments of hair and beauty products in the industry, as well as a full range of custom styling, cutting and hair coloring services. Trade Secret consists of stores operating primarily under four trade names: Trade Secret, Beauty Express, BeautyFirst and PureBeauty.
Trade Secret’s operating performance deteriorated due to three primary factors. First, the global economic downturn led to a reduction in consumer spending on discretionary items such as beauty care products and services. Second, a significant portion of the Company’s retail locations became unprofitable because of above-market leases. Finally, severe disruptions to Trade Secret’s purchasing, store inventory replenishment and accounting functions caused significant declines in sales and profitability. As a result, the Company filed for Chapter 11 bankruptcy protection.
SSG Capital Advisors, LLC (‘SSG’) was retained as Trade Secret’s exclusive investment banker to conduct a sale of the business pursuant to Section 363 of the United States Bankruptcy Code. After managing a rigorous sale process, SSG concluded that the stalking horse bid made by Regis Corporation (‘Regis’) and the Luborsky Family Trust II 2009 (‘LFT II’) was the highest and best offer. The sale of Trade Secret to Regis and LFT II was approved by the United States Bankruptcy Court for the District of Delaware on September 14, 2010 and the sale transaction closed on October 15, 2010.