www.time.com/time/globalbusiness/printout/0,8816,1101040126-578963,00.html

Sunday, Jan. 18, 2004
Because They're Worth It
L'Oreal's marketing tilt toward Asians and blacks makes its growth prospects prettier
By JENNIE JAMES/PARIS

Until she discovered L'Oreal's ethnic-beauty institute on Chicago's South Side, Regina Hatcher had dry, strawlike hair — the price she paid for chemically straightening it. But one Sunday, the African-American security officer, 35, received a tip from a friend whose daughter had turned to the center, formally called the L'Oreal Institute for Ethnic Hair and Skin Research, for help following a disastrous perm. "They got her hair back more healthy and shiny," said Hatcher, who promptly booked an appointment for herself — hoping that L'Oreal's stylists and researchers, armed with a vast array of shampoos, conditioners and gels, could also sort out her tresses. The result? "It was extra soft and bouncy," Hatcher boasts. "I got a lot of compliments." People even hit her with the ultimate admiring cliché: "What did you do to your hair?"

The answer could be worth a pretty penny for L'Oreal. Over the past decade, the world's largest cosmetics concern has transformed itself from a French company focused on white women into a global titan whose skin, hair and cosmetics products are tailored to consumers from Dallas to Delhi. L'Oreal has a strategic gift for taking cosmetics brands, giving them an innovation injection and a marketing makeover, and then rolling them out across the world: antiaging potions for American boomers or lipsticks for young Chinese. L'Oreal is even working on beauty from the inside out: how about a skin-support system that you swallow?

In the U.S., L'Oreal is turning its attention to the rapidly expanding ethnic-beauty market, projected to be worth up to $14.7 billion annually by 2008. Ethnic-beauty care in the U.S. has been dominated by black-centered companies that are close to their customers. Over the past