Cranium Filament Reductions 2.1.3 Market Trends The market trend for the hair cutting industry is one of consolidation Consolidation can be seen with the high-end hair salons as well as the full-service, full-family companies such as Best Cuts. Over the last five years there have been an expansion of upscale chain salons in major metropolitan areas. the expansion takes the form of opening new stores as well as purchasing independently-owned salons and transferring them over to the chain. Additionally this trend has occurred with the full-service family hair cutting stores Cranium is not participating in this trend of aligning itself with a chain. cranium believes that it has better insight to its local market ar ld rather apply this specialized insight instead of adopting the procedures of a national chain Market Forecast 160000 140000 120000 100000 Males Mothers w/children 40000 20052.1.3 Market Trends The market trend for the hair cutting industry is one of consolidation. Consolidation can be seen with the high-end hair salons as well as the full-service, full-family companies such as Best Cuts. Over the last five years there have been an expansion of upscale chain salons in major metropolitan areas. The expansion takes the form of opening new stores, as well as purchasing independently-owned salons and transferring them over to the chain. Additionally, this trend has occurred with the full-service, family hair cutting stores. The reason for this trend is similar to other industries that are consolidating; cost saving measures. Cranium is not participating in this trend of aligning itself with a chain. Cranium believes that it has better insight to its local market and would rather apply this specialized insight to its market instead of adopting the procedures of a national chain. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2002 2003 2004 2005 2006 Males Females Mothers w/children Market Forecast Cranium Filament Reductions Page 4