By and and  on January 28, 2008

LONDON — Is Sephora planning a return to the U.K. high street?

According to press reports, the LVMH Moët Hennessy Louis Vuitton-owned perfumery has been in talks with Marks & Spencer with an eye to opening Sephora shop-in-shops.

If that happens, it would mark Sephora's return to the U.K. after it shuttered its nine perfumeries there in 2005.

Marks & Spencer and Sephora have reportedly discussed opening 10 Sephora spaces to be followed by 100 more if the concept proves successful.

A spokeswoman for Marks & Spencer declined Friday to confirm the retailer is in discussions with Sephora. "We talk to people all the time," she said. "It's nothing to get excited about."

A Sephora spokeswoman, also contacted Friday, declined to comment.

Should such a deal go ahead, it wouldn't be the first shop-in-shop arrangement for Sephora. The retailer struck a deal in 2006 with J.C. Penney to open branded Sephora shops in the U.S. department stores. Those spaces carry brands such as Benefit, Bare Escentuals and N.V. Perricone, as well as Sephora's private label products.

For Marks & Spencer, which carries an extensive range of private label clothing, food and furniture and has more than 600 stores in the U.K., a partnership with Sephora could offer an opportunity to bolster its position in the toiletries and cosmetics arena.

"It could be a profitable marriage of convenience," said George Wallace, chief executive officer of London-based MHE Retail consultancy. "Marks & Spencer's offer in health, beauty and cosmetics is pretty feeble," he added, noting the retailer could profit from Sephora's beauty expertise.

Wallace said he'd expect Marks & Spencer to focus on Sephora's private label products, since its price positioning would suit the Marks & Spencer customer.

Sephora faced intense competition from department stores and high-end beauty retailers, such as Space NK, during its first foray into the U.K., according to industry watchers. Alliance Boots, owner of the Boots the Chemist's pharmacy chain, is also a formidable player in the market.

"If [Sephora] can get wide distribution without massive capital expenditure, it makes commercial sense," said Wallace.


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