By  on April 6, 2007

In just shy of a decade, Sephora has transformed itself from an overseas underdog ­— albeit a glamorous one — into an 800-pound gorilla in the U.S. beauty marketplace.

Its evolution from the red-lipstick-wearing, black-glove-clad French purveyor of fragrance and cosmetics into a multichannel makeup mecca that stretches traditional beauty boundaries was hair-raising and thrilling, said a number of the company's past and present executives.

Sephora's rise was underpinned by its allegiance with emerging beauty brands that had slim prospects of gaining distribution in department stores. From the start, Sephora and the fledging beauty brand were kindred spirits. After all, soon after Sephora's arrival on U.S. soil, it received a lukewarm reception from the beauty establishment, including Estée Lauder and Lancôme. But their disinterest caused a happy accident, of sorts, as Sephora quickly established itself as a haven for the latest, undiscovered beauty offerings. Early adopters of the Sephora model included BeneFit Cosmetics, Stila, Philosophy and N.V. Perricone M.D. Sales indicate that beauty shoppers have welcomed the concept with open arms. Financial sources estimate the typical Sephora store generates $1,200 a square foot and that same-store sales grew by 25 percent last year, while the chain's sales volume surpassed $1 billion in 2006.

David Suliteanu, president and chief executive officer of Sephora USA, explained, "Our evolution very much mirrors that of a new brand. Our early days were filled with lots of changes, so it's easy for us to relate to a brand going through the early stages of growth. We've been there. If they don't do well, we don't do well and our team understands that."

Suliteanu, who took over the helm in 2000, acknowledged that the lack of department store brands helped pave Sephora's path to some extent, but clarified that the beauty chain's evolution would have happened with or without them.

"I think of this business as almost a person's DNA. So we would have turned out just as we did, and the reason is because of our connection with a younger consumer who is interested in what is new and different." He continued, "All we did over the years was listen to her. She wanted brands that weren't readily available elsewhere. And this is where we ended up. I think it was inevitable."

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