The Sephora perfumery chain is about to enter Brazil, the world’s third-largest cosmetics market, and take its first step into South America following its parent LVMH Moët Hennessy Louis Vuitton’s purchase of 70 percent of the Rio de Janeiro-based online retailer Sack's.
The Brazilian retailer offers more than 270 brands and boasts a customer portfolio ofmore than 830,000 clients, with four million unique visitors a month. Financial details were not disclosed and none of the executives would discuss dollars. However, industry sources estimate Sack's has annual retail sales of more than $50 million. The purchase price for the 70 percent stake was estimated at more than $100 million. LVMH declined to comment on the figures.
“They are a market leader and have a tremendous position,” said David Suliteanu, president and chief executive officer of Sephora Americas, based in San Francisco. He indicated that Sack's, founded 10 years ago, is the leading prestige fragrance and beauty leader in Brazil. Suliteanu added that the acquisition will serve as a stepping stone for Sephora to enter the market with brick-and-mortar stores, although he said that, at this point, the American retailer doesn’t have a definitive timetable. However, Suliteanurecalled that before Sephora entered Canada in the fourth quarter of 2005, the chain had been doing business there — and building consumer awareness — via the Internet.
Suliteanu ticked off the pluses in the deal. The Brazilian operation provides an infrastructure and an expertise in regulatory matters in a country where rules are plentiful and complex. The strength of Sack's was described by Suliteanu as an advantage in a market of huge potential that is underpenetrated by premium brands.
Sack's does 60 percent of its sales in fragrance, according to Carlos André Montenegro, co-founder and ceo of the company. Both executives see an opportunity for Sephora to add color cosmetics and makeup to the mix.
Montenegro said he evolved into the Internet business a decade ago as he was pursuing his first love and profession as a disc jockey. It was difficult to keep up with music trends from Brazil, but then he discovered Amazon.com. That paved the way for his Internet business, which has been growing at a double-digit rate and achieving profitability. He sees the power of Sephora and the LVMH group as a way to access brands not available in Brazil.
He also predicted the relationship will move Sack's to a new level, helping the company to grow by five- or sixfold.
The deal is expected to close at the end of July. Montenegro said he will stay in place “for the next coming years.” He and his partners, Albatroz Participações and Marcelo Franco, will continue to own 30 percent of Sack's.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)