NEW YORK — Manhattan's newest beauty shop has ambitions as lofty as the Empire State Building. Called Missha, the South Korean retailer plans to ignite an aggressive store rollout across the U.S., with a goal of opening 1,000 stores over the next five years, said Steve Hwan Kim, president of New York-based Missha USA.
On Tuesday the company feted the opening of its first U.S. store, located here at the corner of Fifth Avenue and 43rd Street. The 3,000-square-foot space — a stark white interior offset with red paneling and bins of colorful cosmetics — houses more than 1,000 items across five categories, namely cosmetics, skin care, bath and body, hair care and accessories. Each item in the store carries the Missha brand name.
The five-year-old retail concept has grown to include a chain of 300 shops stretching across 11 countries, from Mongolia to Australia. Missha will open in China this September, and has plans to enter Europe in 2006, noted Seo Young Pil, president and chief executive officer of Missha Worldwide.
Missha enters the U.S. market just as other specialty shops are digging in their heels. In the past year, Bath & Body Works has transformed itself into a multibrand power, inking deals with C.O. Bigelow and famed dermatologist Pat Wexler. Victoria's Secret, for its part, has also announced plans to introduce a wider breadth of outside beauty brands into its stores.
Several in attendance Tuesday evening noted Missha bares a striking resemblance to Sephora, but company executives prefer to bill the concept as "the H&M of beauty retailing."
"At this moment there is no true competition," declared Kim.
He maintains that the specialty beauty market in the U.S. is missing a value player. Sephora's black interior — the yin to Missha's white-store yang — isn't the only difference between the two beauty bazaars. Price drives a wedge between their business models, noted Kim. Missha's prices range from a $1.49 nail polish to $12 for Oriental Nourishing Cream, with half of the items in the store falling under $5.
"We want to show customers what the original price of cosmetics is," said Kim. He explained that the company, owned by Seoul-based Able C&C, keeps retail prices low by ditching outer packaging, using plastic, not glass, and relying on grassroots marketing. Prior to opening its Fifth Avenue store, the company dispatched teams of people to dole out free samples and promotional flyers. The company will employ the same strategy for the forthcoming SoHo and Union Square locations, both slated to open in August.There are no plans for traditional advertising. Kim commented, "We give all the profit to our customers."
To further squeeze costs, the company is scouting locations in New Jersey for a manufacturing facility, and anticipates finding one by the end of this year.
As for the remaining 997 stores, Missha has hired real estate firm Newmark Retail, known for deals such as SoHo Bloomingdale's, to find locations in bustling shopping hubs, which outside of Manhattan will likely be inside premier malls. Kim anticipates each store will range from 2,000 to 3,000 square feet in size and will generate monthly sales of $300,000. He added that he expects the Fifth Avenue store to turn a profit in the next two months. Industry sources have estimated that Missha likely pays $50,000 in monthly rent for its flagship store.
After its SoHo and Union Square stores are up and running, next on Missha's list is Times Square.
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