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WWD Beauty Forum: Aussie Beauty Retailing with Jo Horgan

Mecca Cosmetica founder charts the growth of her company, which now operates three formats.

It was during long plane rides between Australia and the U.S. that Mecca Cosmetica founder Jo Horgan hammered out a plan to fill the gap of beauty retailing in Australia.

This story first appeared in the May 20, 2011 issue of WWD.  Subscribe Today.

“Seventy percent of cosmetics are sold in department stores [in Australia],” said Horgan, noting a need in the market especially for niche brands. Thirteen years ago, she sought to offer customers an edited specialty beauty option with “the best of the best.” Today her company, Mecca Cosmetica, operates three formats: Mecca Cosmetica, Kit Cosmetics and Mecca Maxima.

“We were a new model, so we couldn’t go head-to-head with department stores,” said Horgan, who said she begged brands to sell her. Many of the beauty companies had little or no recognition in Australia, so Mecca took full ownership of them, handling everything from distribution to marketing. “We are solely responsible for our brands, so we are invested in their DNA and their success,” she said of the lines, which are sold exclusively at Mecca.

The hands-on approach, born out of necessity, clicked. Today Mecca counts 29 stores throughout Australia and New Zealand. Horgan followed that up with Kit Cosmetics, a beauty lifestyle store offering a no-frills approach to finding rare and coveted brands. There are now 10 of these units targeted to a slightly younger customer. The final format is Mecca Maxima, an evolution of Mecca Cosmetics that brings an edited mix of prestige beauty brands into one environment, with more than 3,000 beauty products across 100 brands. Mecca has nabbed a 10 percent share of sales in its markets and enjoys sales growth exceeding 20 percent in a “static” market.

Currently, said Horgan, 50 percent of sales are cosmetics, 35 percent skin care and 10 percent fragrance. She said she sees great opportunities to lift the percentage of fragrance, but that color was the easiest starting point for gaining shopper loyalty because women are more “fickle” and want to try new color brands.

Mecca’s shopper fan base has been built by a network of sales associates who are well trained and passionate about their jobs (there’s less than a 3 percent turnover in staff). Intense training is backed up with clever marketing, making optimal use of store signs and marketing campaigns such as a French theme for Valentine’s Day. Makeover services are offered in stores, building loyalty. “People want unbiased help, advice and brand edits,” said Horgan.