TRENDSPOT: PRESTIGE HAIR SHINES WITH HEALTH

From flowing waves and precision razor cuts to dramatic color, finding exactly the right hairdressers and products is top of mind for consumers. Their quest has gotten easier as prestige salons reposition themselves as "beauty destinations," offering equal access to the world's best hair designs and products.

The robust global health of the hair care category drives double-digit growth for our brands and their salon partners. Of the top 200 fastest-growing salons in the United States, 142 carry Aveda and/or Bumble and bumble-94 of those selling Aveda exclusively. Both brands are highly respected for their product innovation, artistic inspiration and professional education.

Aveda continues to build loyalty with the new Be Curly line, a four-step curl-perfecting system. In addition to the brand's successful Curl Enhancer, there is an award-winning new Shampoo and accompanying Conditioner and Curl Control. Formulated to reduce frizz and define texture, the range has increased the brand's popularity with its growing Hispanic following.

Also gaining traction are new Smooth Infusion Shampoo and Conditioner, which incorporate plant-based ingredients to smooth and soften hair up to 60 percent with daily use. To help lock in color and shine between salon appointments, the brand is offering Color Conserve Strengthening Treatment. The Aveda Men Pure-Formance Hair Care line adds muscle to this high-potential market with products that target men's concerns.

International markets are fertile ground for hair care growth. Aveda has launched in Spain and is expanding in Japan with the opening of its Osaka flagship. Its online business is also thriving, along with its new, secure Professional Connections area and site for students and teachers. About 3.5 million people visited aveda.com in 2007.

Education for hairdressers remains an Aveda hallmark. The brand's 42 Concept Schools prepare students for cosmetology licensing, while its Institutes and Advanced Academies teach seasoned pros new tricks. A new curriculum reinforces the brand's commitment to men. Salon owners and managers who have completed the three courses offered by Aveda's Business College report sales growth of up to 110 percent.

The Aveda mission-to care for the world we live in-resonates with consumers and salon professionals, alike. The brand is the largest corporate customer for wind energy in Minnesota, offsetting 100 percent of the electricity used at its distribution center and main manufacturing plant with its purchases of wind energy credits. During Earth Month 2007, Aveda and its salons raised over $1.8 million to support making clean water a human right. The brand also works with the United Nations to foster sustainable development partnerships between indigenous communities and business.

Bumble and bumble continues to gain momentum as the premier salon-inspired, salon-based brand in prestige distribution. It leverages its reputation for high-quality hairdressing with products such as the best-selling Gentle Shampoo, Super Rich Conditioner and Grooming Crème. These are complemented with specialist collections like Curl Conscious and the Bb. Treatment range.

Bumble and bumble connects with consumers and professionals effectively. Close ties to the world's bestknown fashion designers generate buzz for the brand through fashion shows and photo shoots. Demonstrations at trade events and breakthrough educational programs forge lasting connections with salon professionals. The brand connects with owners, managers and stylists online via its Network Educator Certification website and goes live to hairdressers at Bb. University programs at its New York City flagship and in London. Solid growth in the United Kingdom is setting the stage for expansion in Europe.

For the first time, hair color classes led by award-winning colorist Victoria Hunter have introduced Bumble and bumble to hair colorists, whose high-ticket services boost salon income. Also new is "Bumble on Tour," multi-city road shows for salon customers with lead educators and star stylists such as Jimmy Paul and Laurent Phillipon.

Looking beyond the salon channel, our online sites for Aveda, Bumble and bumble, Clinique and Origins continue to attract visitors. The staff at our Aveda and Origins retail stores give detailed recommen dations on cleansing, conditioning, styling and treatment to consumers. Among Origins' latest offerings are Ain't Misbehavin Lightweight hair spray and Hair Dresser Smooth styling cream. We are targeting men at department stores with Lab Series Root Power Treatment Shampoo and Clinique Skin Supplies for Men Hair Maximizing Serum. Darphin's Volume Shampoo with Gleditschia brings high-end hair care to the pharmacy channel, while Grassroots Time to Shine Shampoo and Conditioner attracts consumers to Kohl's across the United States.