By and  on January 25, 2002

PARIS -- A Chanel powder at 29 percent off. An Estee Lauder lipstick at 32 percent off.

Such bargains and more can be found at many Sephoras across France, Spain, Italy and Luxembourg in a mega-apres holiday promotion, called Prix Craquants (French for wild prices), which runs through Feb. 4. The widespread housekeeping intensifies speculation that LVMH Moet Hennessy Louis Vuitton is gearing up to sell the chain, which has been struggling. As reported, Sephora has pulled out of Germany and Japan and its European and U.S. businesses continue to operate at a loss.

Eyebrows are being raised at the heavy discounting of beauty items across all categories and which include such prestige brands as Christian Dior, Lancome and Yves Saint Laurent. Sephora has traditionally been staunchly anti-discount and anti-gift-with-purchase. The discounts do not apply in Sephora USA.

Numerous beauty manufacturers are furious, fearing their products aren't being treated in a prestigious manner -- that items on sale are not merchandised in clearly branded environments and are not close to testers.

The ruckus is not surprising, given France is the birthplace of the selective distribution contract, which legally upholds prestige brands' rights over their image, though not their price points. Prestige beauty brands here have also been historically wary of Sephora, which merchandises mass and class together.

"The way brands are presented in the promotion is not good," said one executive, who requested anonymity.

Sephora, meanwhile, maintains Prix Craquants is not a harbinger of a shifting position vis-a-vis prestige beauty nor a sign the company is prettying itself up for an impending sale. Patrice Brosson, director of category management for Sephora France, explained Prix Craquants is part of Sephora's current strategy to reduce excess stock due, in part, to the continuous deluge of beauty references in the market yearly.

He also said that while this discounting promotion might be the store's biggest ever size-wise, it isn't its first. For the past 18 months, Sephora has been hosting sporadic, thematic promotions, with the last being Sephora Rouge for the Christmas period.

"It is not our policy to systematically carry out [this type of event]," confirmed Brosson.

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