We are the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. We focus on providing affordable indulgence to our customers by combining one-stop shopping in convenient locations with the distinctive environment and experience of a specialty retailer. Key aspects of our business include:

One-Stop Shopping. We offer a unique combination of over 20,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools, as well as salon haircare products. We also offer a full-service salon in all of our stores.

Our Value Proposition. We focus on delivering a compelling value proposition to our customers. For example, we run frequent promotions and coupons for our mass brands, gift-with-purchase offers and multi-product gift sets for our prestige brands, and a comprehensive customer loyalty program.

An Off-Mall Location. We are conveniently located in high-traffic locations such as power centers and our typical store is approximately 10,000 square feet, including a salon of approximately 950 square feet. As of February 2, 2013, we operate 550 stores in 45 states.

We were founded in 1990 as a beauty retailer at a time when prestige, mass and salon products were sold through distinct channels-department stores for prestige products, drug stores and mass merchandisers for mass products, and salons and authorized retail outlets for professional hair care products. Based upon consumer input and feedback, we pioneered what we believe to be a unique retail approach that focuses on all aspects of how women prefer to shop for beauty products by combining a one-stop shopping, a compelling value proposition and convenient locations, together with an uplifting retail experience.

Our Competitive Strengths

We believe the following competitive strengths have differentiated us from our competitors and are critical to our success:

• Differentiated merchandising strategy with broad appeal – we believe our broad selection of merchandise across categories, price points and brands offers a unique shopping experience for our customers.


• Our unique customer experience – we combine value and convenient locations with the distinctive environment and experience of a specialty retailer. We cater to the woman who loves to indulge in shopping for beauty products as well as the woman who is time constrained.


• Retail format poised to benefit from shifting channel dynamics – we are capitalizing on shifting trends in how manufacturers distribute and customers purchase beauty products by offering a primarily off-mall, service-oriented specialty retail concept with a comprehensive product mix across categories and price points.


• Loyal and active customer base – we have over nine million customer loyalty program members. We utilize this valuable proprietary database to drive traffic, better understand our customers’ purchasing patterns and support new store site selection.


• Strong vendor relationships across product categories – we have strong, active relationships with over 300 vendors, which span the three distinct beauty categories of prestige, mass and salon. The scope and extent of these relationships have taken years to develop and create a significant impediment for other retailers to replicate our model.


• Experienced management team – we have an experienced senior management team with extensive retail experience that brings a creative merchandising approach and a disciplined operating philosophy to our business.

Growth Strategy

We intend to expand our presence as a leading retailer of beauty products and salon services by pursuing the following primary growth strategies:

• Accelerating pace of new store expansion and grow to 1,200 stores in the United States


• Adding new products, brands and services


• Enhancing our successful loyalty program


• Broadening our marketing reach


• Enhancing and expanding our digital business


• Improving our operating margins