Sephora SA has acquired a 45% stake in the selective Russian perfumery chain “Ile de Beauté”. The agreement gives Sephora SA the option to become a majority shareholder in “Ile de Beauté” over time. The current management team will remain in place. This transaction will enable Sephora to become a major player in this high growth market over the next few years. “Ile de Beauté” is one of the leading distributors of perfume and cosmetics in Russia. This move is fully aligned with Sephora’s international strategy to expand into markets with strong potential. Russia is a very high growth market for perfumes and cosmetics and has become one of the leading markets in Europe in this area. “Ile de Beauté” will have a total of approximately 100 stores at the end of 2008, making it one of the leading companies on the Russian market. Its growth momentum is particularly strong and its stores are spread over the entire Russian Federation, particularly concentrated within large towns. The existing franchise between Sephora and Alkor, through which the latter operates the Sephora stores in Russia, will remain in place until its termination, which is provided for in the contract at the end of 2010.