Essanelle Hair Group parts company with mod’s hair
Focus on growth with proprietary salons

Düsseldorf, 31 May 2006 – Essanelle Hair Group AG will part company with its franchise salons operating under the mod’s hair brand and has accordingly terminated the master franchise agreement. The salons will be operated by ICF International Coiffeure Franchising GmbH from 1.7.2006.

The company will rather focus in full on its expansion with proprietary salons, given that these are expected to harbour greater sales and earnings potential. The franchising revenues accounted for around 1% of total sales in the 2005 financial year. The disposal of the franchise rights will generate extraordinary income of around Euro 0.8 million for the Essanelle Hair Group in this financial year.

“The franchise system failed to live up to our expectations in past years. In the future we see hardly any potential, because the salons only generated a low level of product sales, an aspect which makes franchise systems so attractive in other sectors”, commented Uwe Grimminger, Chairman of the Management Board.

Essanelle Hair Group AG is set to grow in the current and subsequent financial years, with around 50 new proprietary stores being opened per year. These will mainly focus on price-sensitive and young customer groups and will therefore operate within the TOP TEN, Super Cut and HairExpress concepts.

“We can rather now channel all of our energies into our expansion with proprietary salons”, added Achim Mansen, Financial Director. “Given that we generated neither any significant profits nor any losses with mod’s hair in past years, the separation will have hardly any impact on our earnings.

Contact:
Haubrok Investor Relations
Michael Müller
+49-21 56-49 65 195
M.Mueller@haubrok.de