Steiner Leisure Limited Acquires C. Spa

Business Wire, July 18, 2001

Business Editors

NASSAU, The Bahamas--(BUSINESS WIRE)--July 18, 2001

Steiner Acquires Quickly Growing San Diego-based Day Spa

Operator With a Reputation for Bringing Innovation and Sound

Business Practices to an Emerging Industry

Steiner Leisure Limited (Nasdaq:STNR), a leading provider of spa services, announced that it has entered into an agreement to purchase the business of the C. Spa day spa group. As part of the transaction, Celeste Dunn, C. Spa's founder, principal shareholder and Chief Executive Officer, will enter into a three-year employment agreement with Steiner Leisure. Under that agreement, Ms. Dunn will serve as the President of Steiner Leisure's North American land-based day spa division. C. Spa, which was founded in 1997, currently has five locations in California and one additional location under development, all of which are located in California.

Leonard Fluxman, President and Chief Executive Officer, confirmed that Steiner Leisure Limited will purchase for $5.5 million in cash the stock of the entity that owns C. Spa and will assume approximately $2.9 million of indebtedness. Also, Steiner will make additional payments of up to $3.0 million if certain earnings benchmarks for C. Spa are met in 2003 and 2004. The transaction is expected to close within the next several weeks.

Celeste Dunn has 20 years of experience in developing and executing strategic business plans for high tech companies. Prior to founding C. Spa, Ms. Dunn served as Vice President of Compaq Computer Corporation's Consumer Division.

According to Fluxman "Ms. Dunn and her management team at C. Spa have worked hard over the past four years to create an operating and development plan for what we feel will be a top quality urban chain of day spas. She has implemented a host of top-notch practices addressing all aspects of the business, including detailed store opening plans, management information systems, customer treatment procedures, community public relations programs to generate new customers and direct marketing programs focused on relationship building and customer retention. We believe she has put in place a platform that is extremely scaleable. With the business methods that she has developed, combined with Steiner's brand names such as Greenhouse, Mandara and Elemis, we believe the acquisition of C.Spa will substantially strengthen Steiner's ability to execute its land-based day spa strategy."

"Joining forces with Steiner gives C. Spa the resources needed to realize the vision of making spa services an essential element of people's every day regimen", says Celeste Dunn. "No other urban day spa provider will be able to match the potential for consistent, exceptional service on a national scale," Dunn continued.

Steiner Leisure Limited (Nasdaq:STNR) is the leading worldwide provider of spa services in the world. The company operates the spas and salons on 111 cruise ships, 50 resort spas and 12 day spas. Our partners include Carnival Cruise Line, Royal Caribbean Cruise Lines, Princess Cruises, Disney Cruises, Celebrity Cruises, Norwegian Cruise Lines and Holland America Lines Marriott, Park Place Entertainment and Sun International. Elemis Ltd., a dedicated spa therapy company, manufactures its Elemis brand for use on board Steiner cruise ships spas. This top quality European line of beauty products is also distributed worldwide to some of the most exclusive five star hotels, salons, health clubs and destination spas. Elemis, as well as other Steiner private label products, including La Therapie, Ionithermie, and Steiner Hair Care, are available at http://www.timetospa.com.

Steiner Leisure also owns and operates three post secondary schools (comprised of nine campuses) located in Miami, Fort Lauderdale, Orlando, Sarasota, Virginia and Baltimore. Offering degrees in massage, advanced therapy and skin care, these schools train and qualify spa professionals for health and beauty positions within the Steiner family of companies or other industry entities.

Forward-looking Statements

Certain statements in this news release and in our other published information may contain forward-looking statements. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performances or achievements to differ materially from future results, performance or achievements expressed or implied in such forward-looking statements. Such factors include our dependence on cruise line concession agreements and land-based spa agreements of specified terms and that are terminable by cruise lines and the lessors of land-based spas with limited or no advance notice under certain circumstances; the risk that renewals of an agreement with a cruise line or land-based spa lessor will require reductions in margins on existing agreements, as well as on the renewed agreement, with that cruise line or land-based spa; our dependence on the cruise industry and our being subject to the risks of that industry; uncertainties beyond our control that could affect our ability to timely and cost effectively construct land-based spa facilities; the risk that the company will be unable to effectively integrate newly-acquired businesses or facilities; changes in tax and other laws and regulations affecting Steiner Leisure Limited and other factors described in further detail in Steiner Leisure Limited's filings with the Securities and Exchange Commission, including the risk factors set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2000.