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MEXICO CITY, Mexico — Sephora plans to roll out 10 to 12 stores in Latin America by 2013 as it moves to capitalize on the region’s fast-growing beauty market, according to Paula Larroque, Latin America senior vice president of the French perfumery chain.
This story first appeared in the December 30, 2011 issue of WWD. Subscribe Today.
Sephora, which opened its first Mexican store in Mexico City in late October, plans to make its debut in São Paulo, Brazil, next April, Larroque said. That store will contain 400 to 500 square meters, or 4,300 to 5,300 square feet, of space and will be located in the city’s new luxury shopping mall, Centro Comercial Iguatemi.
Sephora also opened its second Mexico City shop in the fledgling Paseo Interlomas mall on Dec. 15, Larroque added.
Sephora’s Mexican expansion has so far been very successful, she said, giving the LVMH-owned chain a taste of what it can achieve in Latin America.
“So far, our sales have been extraordinary, so we are feeling very positive about expanding in Latin America and about consumers’ high interest in our brand.”
Eventually, Sephora hopes to be present in Mexico’s and Brazil’s largest cities, Larroque said. However, she declined to provide specific opening locations and timelines.
Next year, however, the firm plans to open more outlets in Mexico City before moving to Puebla and Guadalajara, the country’s second-largest city, she said. In Brazil, the retailer intends to open more São Paulo outlets next year, when it also plans to enter the Rio de Janeiro and Brasilia markets.
Most of Sephora’s future Latin American shops will be set up as headquarter stores, measuring 400 to 500 square meters, Larroque said.
Sephora will continue its Latin American expansion after 2013, when it will likely step up its Brazilian presence and begin looking at other key markets like Argentina, Chile and Colombia, Larroque noted.
“After 2013, we will start looking at other South American markets,” she said. “We know the demand [for a selective perfumery chain like Sephora] is definitely there.”
According to Larroque, Sephora is the first global multicategory selective perfumery to arrive in the region, giving it a first-mover advantage over archrivals such as Germany’s Douglas or France’s Marionnaud.
She said this, coupled with other competitive differentiators, should help the franchise lead the market, currently dominated by department stores, multiretailers and supermarkets.
In Mexico, for example, department stores El Palacio de Hierro and Liverpool have a stronghold on beauty sales.
Sephora hopes to change that by providing customers with a “unique and fun” shopping experience devoid of the pushy sales forces usually present in department stores and other retailers.
“Our approach is totally noninvasive,” Larroque emphasized. “Consumers can touch and try everything and entertain themselves in our stores without anyone hassling them. This shopping experience is unique in Latin America.”
In line with its global strategy, Sephora will also distinguish itself by offering Latin consumers a stable of brands they can’t get elsewhere.
In its maiden Mexican store, located in the swank Polanco quarter, as many as 25 exclusive brands are on sale, notably Make Up For Ever, Urban Decay, Doctor Brand and Clarisonic, among others, Larroque said, adding that future stores in Mexico and Brazil will also carry a large number of exclusive brands to lure shoppers away from competitors.
Sephora’s Mexican and Brazilian stores will have a “pretty similar stock,” though some products may vary to cater to local tastes, Larroque said, adding it’s too early in the expansion to elaborate further.
All said, Sephora’s Latin American stores will stock more than 100 brands and some 7,000 stockkeeping units spread among fragrance, makeup, skin care and accessories, Larroque said.
Regarding store design, future Latin American stores won’t look any different from the newest additions to Sephora’s Americas network, headquartered in San Francisco, where makeup is placed ubiquitously across shops, adding more color to their decor.
Larroque said the Antara location is set up this way to ensure that makeup is always visible to shoppers.
“Makeup is a very important category and one that attracts a lot of people,” Larroque added. “Women like to touch and experiment with it, so we want it to be easily accessible and visible from all of the store’s areas.”
Still, Larroque insisted this strategy is not a detriment to the other categories, adding that Sephora’s current (and future) shops stock skin care and fragrance brands in proportion to makeup.
Store aesthetics apart, Larroque said Latin America’s prestige beauty market is growing very strongly, making this an auspicious time for a purveyor of luxury beauty products to set up shop. Latin America’s luxury apparel and accessories market is also forecast to grow sharply, with Brazil, Mexico and Argentina expected to deliver gains of 20 percent, 22 percent and 30 percent, respectively, in 2011, according to consultancy Bain & Co.
“Right now we are concentrating in two markets, but we think Latin America will be a very interesting market for us in the long term,” Larroque added. “Latin American consumers love beauty. They are, in fact, beauty junkies interested in trying out all the new brands in all the categories.”