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Beauty Beat: Sephora Said in Talks With M&S…

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

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

This story first appeared in the January 28, 2008 issue of WWD.  Subscribe Today.

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.

 

— Brid Costello, with contributions from Jennifer Weil, Paris, and Laura Mitchell, London

Inter Parfums SA Sales Up 12%

PARIS — Inter Parfums SA posted 2007 sales gains of 12 percent year on year to 242.1 million euros, or $331.9 at average exchange, largely in line with its expectations.

At constant exchange rates, revenue growth stood at 15 percent in the period.

The company, which is the Paris-based subsidiary of Inter Parfums Inc. in New York, reported its sales were boosted by stronger-than-expected year-end growth. However, the company’s 2007 business was negatively impacted by the adverse euro-dollar exchange rate; unintentionally low inventories of Van Cleef & Arpels fragrances until the fall, and a slower-than-expected start of Inter Parfums’ European distribution subsidiaries.

By brand, sales came in at 152.9 million euros, or $209.6 million, up 7 percent for Burberry; 33.3 million euros, or $45.6 million, down 3 percent for Lanvin; 18 million euros, or $24.7 million, a 2 percent gain for Paul Smith; 11.1 million euros, or $15.2 million, a 10 percent uptick for S.T. Dupont; 3.9 million euros, or $5.3 million, a 5 percent decrease for Christian Lacroix, and 3.3 million euros, or $4.5 million, a 19 percent drop for Nickel.

Van Cleef & Arpels, whose beauty license Inter Parfums has had since last year, made 11.9 million euros, or $16.3 million. And Roxy, whose first fragrance came out in August 2007, rang up 6.7 million euros, or $9.2 million.

Western Europe, excluding France, rang up the lion’s share of Inter Parfums SA’s sales, at more than 30 percent of total business. The company said Burberry fragrances’ success in the U.S. drove its North American revenues.

Inter Parfums SA confirmed its sales targets of 260 million euros, or $381.6 million at current exchange, for this year based on the current euro-dollar exchange rate and in light of its upcoming fragrance introductions.

Inter Parfums SA’s shares closed up 2.1 percent to a unit price of 26.80 euros, or $39.33, on the Paris Bourse Friday.

— J.W.