Urban Decay Sets Up in Macy’s West

LOS ANGELES — Urban Decay is placing in-store boutiques in Macy's West beauty departments.

The Costa Mesa, Calif.-based cosmetics company first opened a 300-square-foot concept at the Macy's store in San Francisco's Union Square Nov. 4, then opened a 500-square-foot concept at the retailer's Valley Fair unit in San Jose last Thursday.

Next year, Urban Decay expects to spread the shop-in-shops to an additional four to six Macy's West stores kicking off in February with a 550-square-foot space at Costa Mesa's South Coast Plaza. If they prove successful, the concepts, which spotlight 225 stockkeeping units, could reach Macy's East. Each shop-in-shop is projected to generate around $800,000 in first-year sales.

"We are going to start with the top three doors," said Urban Decay general manager Tim Warner, who previously helped build Benefit's department store business as executive vice president at that brand. "I don't believe in starting at the bottom and trying to crawl up. We are making a major investment in terms of building in-store installations, and Macy's West has really come to the table with great locations."

The departure of the Biotherm brand, which was taken out of distribution in brick-and-mortar stores by parent L'Oréal in March, freed up space for the Urban Decay in-store boutiques. Designed with the Royal Promotion Group, the shop-in-shop displays' primary hue is Urban Decay's signature purple. A variety of materials, with textures ranging from mirrored to leather-like to tufted, are meant to evoke a plush boudoir feel. Interactivity is encouraged: customers are able to walk behind the counters and view every color of eye shadow, an item that Urban Decay is known for, on a wall of shadows.

Wende Zomnir, co-founder and creative director of Urban Decay, said the brand had limited exposure in department stores, including Nordstrom and Macy's, several years prior to the shop-in-shops and therefore couldn't thoroughly communicate the brand's message of being "feminine, dangerous and fun." Urban Decay will have a dedicated staff of six people at the Macy's West shop-in-shops.

"We were either in caseline or cap, but never in our environment with our own people," said Zomnir. "It is a completely different experience. When you walk into this installation, you are going to understand what the brand is all about. Before we were never able to portray that."Elizabeth Morello, senior vice president and general merchandise manager for Macy's West, said the department store was attracted to Urban Decay because it has a wide audience. Zomnir pegged the brand's typical customer as an 18- to 35-year-old woman, but emphasized the makeup is wearable for consumers across the age spectrum.

"They [Urban Decay] are very diverse, and we thought that would be a big plus," said Morello. "We always look for lines that appeal to a diverse range instead of any one [consumer group.]"

Warner anticipates that Urban Decay's bestsellers elsewhere — $15 24/7 Glide-On Eye Pencils, $15 Eyeshadow Primer Potions, $18 Heavy Metal Glitter Eyeliners and $16 eye shadows — will prove to be the bestsellers at Macy's West. The brand is now distributed at 700 doors worldwide, including Sephora and Ulta, and it is estimated Urban Decay will reach $100 million in retail sales volume this year. About 35 percent of Urban Decay's sales are from the U.K.

Although Warner and Zomnir are careful that Urban Decay doesn't rely on one retailer to propel its business, Warner has high hopes for the company's Macy's West shop-in-shops. "There isn't any reason why this brand can't become the number-seven brand within the Macy's organization," he said.

Created in 1996 by Zomnir, David Soward and Sandy Lerner, co-founder of Cisco Systems, Urban Decay was acquired by LVMH Moët Hennessy Louis Vuitton in 2002. Two years later, LVMH sold the brand to the Falic Group, a Miami-based operator of duty free stores that snapped up cosmetics brand Hard Candy at the same time. Zomnir said Urban Decay plans to open its own branded stores in 2008 or 2009.

— Rachel Brown

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