Media Instrumental In Apprehension Of US$1 Million Shampoo Counterfeiter

Business Wire, April 13, 1999

BEVERLY HILLS, Calif.--(BUSINESS WIRE)--April 13, 1999--

"This is an issue of consumer safety and corporate honesty,

not consumer savings and corporate profits."

As a result of intense media coverage during the last two months, the fugitive Joseph F. Thompson of Newport Beach, California, has returned from Mexico and surrendered to the Los Angeles District Attorney. On Wednesday, 14 April 1999, at 9:00 a.m. in Room 5-307 at the Los Angeles Superior Court- Criminal Division, 210 West Temple Street, Thompson will plead guilty to violating Penal Code Section 350(D)(3) and will then be sentenced to 16 months in jail. Thompson will also be ordered to pay restitution to Beverly Hills, California-based John Paul Mitchell Systems, which distributes PAUL MITCHELL(R), the leading brand of professional salon hair care products in the United States.

Thompson was involved with the creation of 10 forty-foot tractor-trailer loads of counterfeit PAUL MITCHELL(R) products, worth approximately US$1 million at retail. He was initially charged with conspiracy and counterfeiting a trademark, but disappeared before being prosecuted by the Office of the Los Angeles County District Attorney. Recently, John Paul Mitchell Systems management witnessed the destruction in Long Island, New York, of the US$1 million in counterfeit PAUL MITCHELL(R) products that had been purchased by Ronkonkama, New York-based Quality King Distributors from Joseph F. Thompson. (See 16 February 1999, The Orange County Register (http://www.ocregister.com) in Orange County, California, article, "Fake-Shampoo Trial").

"The media was instrumental in bringing Mr. Thompson to justice," said Michaeline Re, Chief Legal Officer of John Paul Mitchell Systems. "If we had not been able to stop Mr. Thompson before the products reached the market, Mr. Thompson would have endangered the consumer and harmed our brand name. The Office of the Los Angeles District Attorney is to be commended for their pursuit of this case."

In March 1999, John Paul Mitchell Systems sued in the United States District Court in the District of Massachusetts, Wellesley, Massachusetts-based Filene's Basement Corporation (Nasdaq: BSMT) (1998 revenues exceeding US$500 million) and Ronkonkama, New York-based Quality King Distributors, Inc., for selling unauthorized and counterfeit PAUL MITCHELL(R) products. A jury trial has been requested.

"Our company will continue to use every legal remedy available to eliminate the counterfeiting and the diversion of our products. This is an issue of consumer safety and corporate honesty, not consumer savings and corporate profits. The consumer can only be confident of receiving genuine PAUL MITCHELL(R) products when they are purchased from a professional hairstylist," stated John Paul DeJoria, Chairman and Chief Executive Officer of John Paul Mitchell Systems.

John Paul Mitchell Systems supports the enactment of a federal law, such as the Trademark AntiCounterfeiting Act of 1998 (H.R. 3891), which was introduced by Representative Robert W. Goodlatte (R-Virginia) in the United States House of Representatives, and gained the support of a majority of the 435 members of the House of Representatives during a vote in 1998. Similar legislation is expected to be re-introduced this month in the United States Congress. A federal law resulting from this type of legislation will protect the right of a consumer to be confident about the integrity, quality, and safety of the product that they purchase.

John Paul Mitchell Systems received the 1999 Authentification News(TM) Global Anticounterfeiting Award for Outstanding Achievement. The award recognized efforts by the company in protecting its brands from counterfeiting and/or diversion.

John Paul DeJoria will deliver the keynote address at the annual meeting of the members of the Washington, D.C.-based International Anticounterfeiting Coalition (IACC) being held at the Westin Seattle Hotel in Seattle, Washington, on 20 May 1999.

John Paul Mitchell Systems is the leading privately owned professional hair care company in the United States. With sales at retail exceeding US$600 million annually, John Paul Mitchell Systems markets more than 90 products in forty-five countries through nearly 110,000 hair salons. All PAUL MITCHELL(R) hair care and skin care products are manufactured in the United States.

Contact Telephone Numbers

John Paul Mitchell Systems (707-823-0503)

Los Angeles County Deputy District Attorney William D. Clark

(213-580-3200)

Quality King Distributors (516-439-2000)

Filene's Basement Corporation (617-348-7000)

International Anticounterfeiting Coalition (202-223-5728)