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MEI SALONS AND SEARS REACH NEW LICENSING AGREEMENT FOR IN-STORE BEAUTY SALONS

 MINNEAPOLIS, May 18 /PRNewswire/ -- MEI Diversified Inc. announced today that its majority owned beauty salon subsidiary, MEI Salon Corp. (MEI Salons) and Sears Roebuck & Co. (Sears) have reached a new U.S. licensing agreement affecting the full-service beauty salons operated by MEI Salons in selected Sears stores. Under terms of the new contract, MEI Salons and Sears have agreed to a new license agreement and the closing of a number of unprofitable salon locations. Sears is MEI Salon's largest customer.
 MEI Salons is currently operating under protection of Chapter 11 of the U.S. Bankruptcy Code. To return its salon operations to profitability, the company is seeking to negotiate new salon license agreements with its host department stores and mass merchandisers and to close selected unprofitable salons. "We believe our salons help reinforce the fashion and service image of host stores," said Gary Hollister, president and chief executive officer of MEI Salons. Hollister further stated that MEI Salons intends to offer employees within its salons that are closing the opportunity to transfer to other MEI Salons' locations.
 MEI Salons owns Essanelle Salon Co., Maxim's Beauty Salons, Inc. and The Glemby Company, Inc. The three subsidiaries operate professional beauty salons in the United States and Canada, principally in leased space in major department stores and mass merchandisers.
 -0- 5/18/93
 /CONTACT: Gary Hollister or Grant Oppegaard, 612-936-4201, both of MEI Salon Corp/


CO: MEI Diversified Inc. ST: Minnesota IN: REA SU: PDT

DB -- MN008 -- 9871 05/18/93 15:00 EDT
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Publication:PR Newswire
Date:May 18, 1993
Words:251
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