By  on August 17, 2005

Retailers on this side of the world should breathe a sigh of relief that Jo Horgan lives on the other. Over the past seven years, she has built Mecca Cosmetica into the premier niche cosmetics chain in Australia. With same-store sales growth of over 20 percent per annum, Horgan has decided to spread her wings even further. She recently launched a second retail concept, called Kit, with plans to open 10 stores over the next two years. Horgan, whose modesty belies a fierce intellect and killer business instinct, says her goal is to become Australia's third established chain of distribution for beauty. Those who know her business—which industry sources estimate will reach sales of $30 million by the end of 2006—would probably say she's already there.

Beauty Biz: How is the overall retail climate in Australia currently?

Jo Horgan: After quite a few years of very healthy growth, it's going through a stagnant period, with department stores forecasting flat sales over the next 12 to 18 months.

BB: Did that give you pause when deciding to launch Kit?

J.H.: No. We launched Mecca Cosmetica at a time when retail was tough and the Australian dollar versus the U.S. dollar went through the floor. Launching in that climate really made us think through every single decision in an incredibly conservative and frugal way. It teaches you to be a much leaner start-up.

BB: What's the premise behind Kit?

J.H.: In terms of positioning, it is New York loft meets student digs meets Amsterdam cafe meets underground garage rock band. It's accessible, approachable and appealing to a broad base of consumers, men and women and teenagers. It focuses more on body, home fragrance and color and natural skin care and doesn't represent the more serious side of cosmeceuticals and what I call blockbuster niche brands with huge offers.

BB: What was the genesis of the concept?

J.H.: At the last WWD Beauty CEO Summit, two figures really stuck out: The first was that niche cosmetics now make up 12 percent of the U.S. market; the second was that specialty retail had gone from a very small base 15 years ago up to 27 percent today. With Mecca, we have a clearly defined positioning that works well. I started brainstorming with Robin Coe-Hutshing [owner of Studio at Fred Segal] on what could be interesting in this market. From those early discussions, the concept was born.

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