PARIS — As the wonder retail panorama shape-shifts quickly, Sephora has been increasing — most not too long ago with the announcement Friday of its transfer to amass Feelunique.
Sephora stated it has entered into an settlement with Palamon Capital Partners and different shareholders to purchase the British on-line magnificence retailer.
The information confirmed a report revealed by WWD on July 18, and got here a month after the LVMH Moët Hennessy Louis Vuitton-owned magnificence retailer revealed it had signed a long-term strategic partnership with Zalando to create a status magnificence expertise on-line, beginning in Germany within the fourth quarter of this 12 months.
Sephora has not been operational for years within the profitable U.Ok. market. The U.Ok. and Germany are amongst Europe’s prime three international locations for magnificence gross sales and are dominated by the retailers Boots and Douglas, respectively.
According to Statista, which tracked the main cosmetics and private care sellers in Europe primarily based on gross sales in 2019, Walgreen Boots was the most important, with an annual income of 26.6 billion euros, whereas Douglas Holding got here in sixth, with gross sales of three.5 billion euros, and Sephora positioned seventh, with an estimated 3 billion euros in gross sales.
Sephora stated the Feelunique acquisition is predicted to shut throughout the second half of this 12 months.
Terms of the deal weren’t disclosed, however a current report in The Sunday Times of London valued Feelunique at 132 million kilos.
“The transaction is a key step in Sephora’s European development technique and marks a primary step for Sephora’s presence into the United Kingdom, one of many top-10 greatest status magnificence markets worldwide, with a really excessive degree of digital adoption,” Martin Brok, president and chief government officer of Sephora, stated in a press release. “U.Ok. customers have a powerful urge for food for a rigorously curated status magnificence provide that’s tailor-made to their wants, and supplied by a consumer-centric, seamless expertise.”
“Sephora is an iconic retailer within the status magnificence area in Europe. We are wanting ahead to working collectively and leveraging our respective strengths to drive the status magnificence phase within the U.Ok.,” stated Sarah Miles, CEO of Feelunique.
Industry specialists agreed the time is true for the acquisition, one cause being the web magnificence market has registered speedy positive factors because the coronavirus well being disaster started.
“The COVID-19 pandemic has accelerated customers’ shift to on-line procuring, and the share of e-commerce rose from 13 p.c of whole magnificence and private care retail gross sales within the U.Ok. to 19 p.c in 2020,” stated Marguerite Le Rolland, senior analysis supervisor, attire and footwear at Euromonitor International.
According to the market analysis agency’s “Voice of the Consumer, Lifestyle Survey,” fielded in February, 34 p.c of Millennials and 40 p.c of Gen Zers within the U.Ok. are buying magnificence on-line by their smartphones.
“By placing a partnership with Zalando and buying Feelunique, Sephora ensures they’re utilizing seamless know-how and rising their potential to supply totally different procuring experiences catering for the totally different tastes and calls for of the younger British shopper,” stated Le Rolland.
Also within the U.Ok., specialist magnificence on-line retailers’ gross sales grew by greater than 40 p.c to succeed in 1.4 billion kilos in 2020, in keeping with Mintel.
“Our knowledge additionally exhibits that 4 p.c of magnificence and private care consumers bought merchandise by way of Feelunique in 2020, placing the enterprise on a par with the likes of Lush,” stated Nick Carroll, affiliate director of grocery and e-commerce analysis at Mintel.
“With on-line magnificence gross sales quickly rising and Feelunique being on the forefront of this within the U.Ok., it’s no surprise that plenty of different high-profile bidders have been wanting on the enterprise, together with Asos,” he continued. “So that is well-timed for Sephora, a enterprise which is individually boosting its personal direct on-line presence and might clearly study from Feelunique’s successes.”
Due to Brexit, Sephora not delivers merchandise within the U.Ok., the place competitors retains ramping up. Harrods has been rolling out freestanding magnificence shops throughout the nation, and Boots is updating its provide and refurbishes shops there, for example.
Sephora made a foray into the U.Ok. in 2000, when it opened its first U.Ok. location on the Bluewater Mall in Kent. Five years later, in April 2005, WWD reported the retailer would shut all 9 of its U.Ok. shops. Three of its U.Ok. outposts had already shuttered by then, although the unique concept had been to open 50 Sephora places within the British market inside a number of years.
Sephora reentered the German market in 2017, after leaving it in 2001, and right this moment it has 5 bodily shops and 16 corners in Karstadt Kaufhof.
For Feelunique, a sale has been a very long time coming. At the top of 2018, its homeowners known as off one other sale after bidders didn’t match the positioning’s valuation of 200 million kilos.
Not lengthy after, Joël Palix, Feelunique’s CEO, exited the corporate and was succeeded by Miles. She joined from Amazon Inc., the place she had served as EU advertising and marketing and new enterprise director at Amazon Fashion.
Feelunique, which has each retail and market channels, was based in 2005. It counts 1.3 million lively clients, and greater than 35,000 cosmetics and perfume product from greater than 800 manufacturers, from probably the most established to area of interest. The platform presents make-up, skincare, hair care, perfume, equipment, units and sexual wellness merchandise.
The firm ships to greater than 120 international locations and boasts devoted web sites in European Union international locations, together with France, Germany and Norway, as properly as the U.S. and China.
The bulk of Feelunique’s gross sales stem from Gen Z customers and Millennials underneath the age of 35.
The firm stated in 2020 it achieved “report ranges” of gross sales, that are considered within the neighborhood of 120 million kilos, and buyer acquisition numbers.
Meanwhile, additionally within the U.Ok., many high-street giants want to woo the British magnificence buyer.
Last 12 months, Boohoo purchased the defunct Debenhams, and stated it plans to leverage the division retailer’s magnificence model relationships and domesticate its loyal clientele in that area.
Boohoo and its rival Asos are undoubtedly eyeing the success that British vogue and way of life big Next has had within the sector.
In 2019, Next purchased the web premium and well-being retailer Fabled by Marie Claire from Ocado Group and commenced rolling out bodily magnificence and residential idea shops within the U.Ok. to accommodate the lots of of labels it carries.
“The on-line retail panorama within the U.Ok. is changing into more and more fragmented and aggressive with pure gamers — each magnificence and vogue — competing in opposition to the brick-and-mortar retailers,” stated Françoise Therin, head of Europe magnificence retail at The NPD Group. “With its years of expertise as a world specialist in magnificence retail, Sephora is aware of and understands what the customers need, so no matter occurs the largest winner within the U.Ok. would be the shopper.”
And it’s not simply within the U.Ok. Beauty’s retail panorama — each on- and offline — retains morphing at warp pace across the globe, together with tie-ups like Sephora’s long-term partnership signed with Kohl’s Corp. within the U.S. in December 2020.
Three weeks prior, Ulta Beauty unveiled a cope with Target Corp. to open 100 shops-in-shop within the second half of 2021.
Meanwhile Amazon has been constructing premium magnificence manufacturers, together with RéVive Skincare and Clé de Peau Beauté, into its new Amazon Luxury Store provide.
“There are a number of issues that we should always all hold an eye fixed open for,” stated Therin. “The conventional retail traces of brick-and-mortar and e-commerce, and retailers and types, have gotten more and more blurred. Take, for example, {the marketplace} exercise of magnificence manufacturers in China, which is an extension of their ever-growing direct-to-consumer exercise. So manufacturers have gotten retailers and in some unspecified time in the future we’ll begin to see marketplaces develop extra in Europe, with a number of magnificence retail specialists already having choices in place.
“In the broader retail context, there’s the query of whether or not a few of the pure gamers will enter into brick-and-mortar to offer an ‘in actual life’ expertise for his or her customers,” she continued. “The permutations are seemingly limitless, however retail is morphing, pushed by the customers’ want for change.”
SEE ALSO:
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