TBG RESTRUCTURING AND DISCONTINUED OPERATIONS:

9 Months Ended

Mar. 31, 2020

Discontinued Operations and Disposal Groups [Abstract]

TBG RESTRUCTURING AND DISCONTINUED OPERATIONS

TBG RESTRUCTURING AND DISCONTINUED OPERATIONS:

In October 2017, the Company sold substantially all of its mall-based salon business in North America, representing 858 salons, to The Beautiful Group (TBG), who operated these locations as franchise locations until June 2019. In June 2019, the Company entered into a settlement agreement with TBG regarding the North America salons, which, among other things, substituted the master franchise agreement for a license agreement. The Company classified the results of its mall-based business as discontinued operations in the Condensed Consolidated Statement of Operations. Included in discontinued operations in the fiscal years presented are adjustments to actuarial assumptions related to the discontinued operations and income tax benefits associated with the wind-down and transfer of legal entities in fiscal year 2019. Other than the items presented in the Consolidated Statement of Cash Flows, there were no other significant non-cash operating activities or non-cash investing activities related to discontinued operations for the nine months ended March 31, 2020 and 2019. 

In the second quarter of fiscal year 2020, TBG transferred 207 of its North American mall-based salons to the Company. The 207 North American mall-based salons transferred were the salons that the Company was the guarantor of the lease obligation. The transfer of the 207 mall-based salons occurred on December 31, 2019, so the operational results of these mall-based salons are included in the Condensed Consolidated Statement of Operations beginning in the third quarter. The assets acquired and liabilities assumed were not material to the Condensed Consolidated Balance Sheet. Professional fees and other restructuring related charges of $0.1 and $2.4 million in the three and nine months ended March 31, 2020, respectively, were recorded in the TBG restructuring line on the Condensed Consolidated Statement of Operations. As of March 31, 2020, prior to any mitigation efforts which may be available, the Company remains liable for up to approximately $26 million related to its mall-based salon lease commitments on the 190 salons that remain open, a $15 million reduction from June 30, 2019.