Beauty Retailer of 2008

Despite tough times, these four retailers proved they have the mettle to move the merch, thanks to unique combinations of brands, service and style.

From left to right: Macy's Herald Square, CVS' Beauty 360, HSN's Eye By Design and Serious Skin Care, Regis' Pure Beauty.
Appeared In
Special Issue
Beauty Inc issue 12/12/2008

Despite tough times, these four retailers proved they have the mettle to move the merch, thanks to unique combinations of brands, service and style.

This story first appeared in the December 12, 2008 issue of WWD.  Subscribe Today.


Out of the crunch of industry consolidation has emerged a renewed, dominant force in beauty retailing, the 850-door Macy’s. Now a national chain with sales estimated at more than $3.5 billion, Macy’s modernized its outlook to fit the times this year. The retailer has embarked on a campaign of being customer-centric with an emphasis on service. It’s also updating its product strategy, most notably with the rollout of the first of 10 shop-within-a-shop concepts, called Beautiful Planet, that showcase natural and organic brands. The first, measuring about 300 square feet, opened in New York’s Herald Square in September. Plans call for 10 more this year, followed by another eight next. “This is our first venture in merchandising a singular idea, rather than a vendor statement,” said Christine Johnston, senior vice president of cosmetics and fragrances for Macy’s East. Asserting that natural cosmetics represents a shift in lifestyle, rather than just a trend, she continued: “It’s about giving our customers an alternative.” Macy’s also opened expanded beauty departments in what could be the first of 100 such moves in lifestyle mall centers over the next five years. The cosmetics department measures 7,500 square feet—rather than the expected 5,000 square feet—to provide customer-friendly merchandising touches. One of the most directional moves is to train beauty advisers to cross-sell between brands, rarely heard of in department stores. Macy’s new approach extends to its national TV advertising campaigns, which began with its celebrity vendors taking a star turn and ended up with individual brands being promoted in its 150th anniversary spots that also touted the store as a beauty destination.
—Pete Born

CVS Beauty 360

Some years ago, CVS Pharmacy decided it wanted to play in prestige beauty’s sandbox. And why not? The drugstore chain has spent the last five years improving the beauty shopping experience in its own box, importing premium brands, codeveloping new lines and clearing space for premium, clinical skin care. CVS had earned its right to dabble in the luxury arena, and a number of niche, high-end firms agreed. This year, the retailer introduced a stand-alone beauty concept called Beauty 360, to be located adjacent to its drugstores and accessible via a breezeway or separate front entrance and stocked with luxury brands. The first opened in November in Washington, D.C.; some 500 more are slated to open over the next several years. The assortment is broad and includes makeup from Paula Dorf and Laura Geller, and skin care from Freeze 24-7, Ahava and Dr. Brandt, as well as several newer brands such as Canyon Ranch skin care and It Cosmetics. Fragrance walls are stocked with brands from P&G Prestige, Coty Inc. and Clarins. The units feature a treatment room, and will offer services such as manicures, facials and makeup application. Though the specialty arena is competitive, CVS is optimistic about success. When asked what its edge will be against competitors such as Space NK, Sephora and Ulta, Mike Bloom, senior vice president of merchandising, was succinct: “Convenience,” he said. “Nobody can replicate our real estate. We are convenient and that’s what the shopper wants.”
—Molly Prior



Talk about being tuned in. HSN has established a strong foothold as a beauty authority by offering an upscale lineup of new exclusives from major beauty brands. Over the last year, the electronic giant—which broadcasts to 90 million homes and is ranked in the top 10 most trafficked e-commerce sites—signed deals with the Estée Lauder Cos. for an innovative makeup concept called Eyes by Design and with Coty Inc. for a variety of products including skin care and fragrance, among others. The retailer also has partnered with Carol’s Daughter and with Sephora to offer a plethora of indie brands, as well as brought to market its own exclusives such as Wei East and Carol Alt’s Raw Essentials. HSN also has introduced a new 360-degree lifestyle platform integrating television, the Internet, podcasts and other multimedia initiatives. “We’re trying to ‘dimensionalize’ our business for people. We want to create a venue where people can watch, learn, be inspired and gain confidence in the products that are right for them,” said Mindy Grossman, chief executive officer of IAC Retailing at IAC/InterActiveCorp, which owns HSN. In total, HSN has added 40 new beauty brands, cut back time on promotional products and raised the core productivity of its existing brands. Other initiatives included efforts on YouTube, Facebook and MySpace, plus a program where customers could vote through a sampling program on which new fragrance they should launch next. More than 20,000 women voted, and the first new fragrance launched in April with a built-in audience.
—Michelle Edgar

Pure Beauty

How does the saying go?: “Plans were made to be broken”? That may have been Regis’ mantra earlier this year when the $3 billion beauty salon giant announced it was purchasing and expanding Pure Beauty, a chain that seemed to portray a much more valid beauty concept than Trade Secret, which Regis had originally earmarked for growth. By slating many of Trade Secret’s 630-unit professional hair care–focused stores into broad beauty stores, Regis enters into direct competition with specialty retailers, including Ulta, Sephora and Bath & Body Works. So far, so good. A Pure Beauty prototype was unveiled in March in Bloomington, Minn.’s Mall of America, with brands ranging from Tweezerman tweezers to Jessica Simpson’s HairDo to Frédéric Fekkai shampoo to Yves Saint Laurent cosmetics. The 1,900-square-foot space merchandises about 75 brands overall and also has a salon and spa to perform hair and beauty services. All of these new additions look to swell the average ticket to $37, up from $26. Sales per square foot are estimated to grow to $750, up from $400 to $430, and will help yield a positive sales uptick in 2009, predicted Paul Finkelstein, Regis’ chief executive officer
—Andrea Nagel

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