WWD.com/beauty-industry-news/retailing/sephora-headed-to-new-markets-458972/

PARIS — Sephora has expansion plans in store.

This story first appeared in the April 4, 2008 issue of WWD.  Subscribe Today.

The LVMH Moët Hennessy Louis Vuitton-owned perfumery chain this week announced it will enter eight markets and open 170 stores in 2008. It also said it will revamp its store design, which is famed for its sleek black, red and white interiors, in an effort to remain fresh and modern.

The moves follow a strong 2007 for the chain, which counts 1,000 stores and corners in 23 countries, when sales grew in double digits. (Sephora does not break out sales figures.) Renato Semerari, chief executive officer of Sephora Europe, said he hopes to repeat that performance this year.

“Our biggest challenge for 2008 is to continue on the same path at the same pace, especially in an economic context that is quite worrying,” he said. “The challenge remains to continue growing on a comparable-store basis, to keep the expansion plan we have and to successfully enter new markets.”

Openings are in the pipeline for Kuwait in May and first doors are planned for Bulgaria, Hong Kong, Macao, Singapore, Malaysia and Thailand by yearend.

Sephora will double its store count in China to between 60 and 70 boutiques this year, while in Russia, plans include up to 13 openings plus 111 new corners in partnership with the Etoile group. Elsewhere in Europe, around 60 openings are planned by yearend. In Canada and the Middle East, four and 13 more stores are planned, respectively. In the U.S., where same-store growth increased by double digits for the seventh year in 2007, Sephora plans to open 36 stores this year. The retailer now boasts 70 J.C. Penney Co. Inc. corners.

While Semerari was mum on speculation that Sephora will replicate its J.C. Penney deal in the U.K. with the Marks & Spencer chain, he did say a similar deal with Dutch chain Vroom & Dreesmann will be instrumental in determining if the concept of opening shops-in-shops within department stores has legs in Europe.

“It is really important for us to succeed in the Netherlands,” said Semerari. “Then we’ll have a strong indication of whether opening in department stores is a viable method of expansion for us.”

As well as firing up international expansion plans, Sephora has instigated a makeover of existing doors, turning to French architect Jean-Michel Wilmotte to freshen up Sephora’s store design.

Features of the tweaked in-store look include color-coded backlit boxes to more clearly indicate product category zones and column-like wall units designed to highlight particular items and promotions.

“Sephora has always stood out because of the beauty of its stores compared to our competition, especially in Europe,” said Semerari. “We are committed to maintaining this.”

The concept will bow in May in Sephora’s Champs-Elysées flagship and in a new boutique at Paris’ Gare de L’Est train station. Other doors in Europe will get the look this summer.

Outside of its own stores and corners, the retailer is also trying out the French shopping network M6 Boutique, where it began selling its private label lines, plus select exclusive brands, late last year. Sephora’s own brand business grew by 44 percent in 2007, according to the firm, which introduces some 300 products to the lineup every year. The Sephora brand now boasts 1,400 units.

In other Sephora news, Natacha Dzikowski, formerly global brand image director of Sephora France, has been named advertising director of the LVMH-owned Christian Dior fashion house, effective since Tuesday. Anne-Veronique Bruel, who was previously general manager of Sephora’s business in the Iberian Peninsula, has replaced Dzikowski at Sephora in the redefined role of strategic marketing manager.