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Beauty Brands Find Risk and Reward In Selling At Sephora

January 8, 2017: 12:00 AM EST
Sephora now has more than 2,300 stores worldwide and some beauty brands are increasingly finding the store challenging to deal with. The store, which is owned by LVMH Moët Hennessy Louis Vuitton SE, seems to favor LVMH brands, and also has a growing line of private label products that can give it an advantage. An assessment by The Wall Street Journal found that in the makeup area of a Sephora store, LVMH’s beauty brands can occupy nearly half of the shelf space, even though they have only 15 beauty brands compared with over 200 the retailer typically carries. Beauty brands are responding by trying to secure alternate outlets. Estée Lauder has promoted its own website as well as its MAC Cosmetics stores, while L’Oréal has opened stores for its Urban Decay brand. Some brands are also selling in lower market stores such as Ulta Salon Cosmetics & Fragrance Inc., a risky practice that can remove allure from a brand.  Brands selling at Sephora are also vulnerable to its own label Sephora Collection line. Sephpora can use its sales data to spot fast rising niches and then develop price competitive alternatives.  [Image credit © Caia Image]
Khadeeja Safdar and Sharon Terlep, "As Sephora Adds Products, Rivalry Heats Up at Its Stores", Wall Street Journal, January 08, 2017, © Dow Jones & Company, Inc.
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