“The time is here for change,” declared Joe Magnacca, the president of Duane Reade, at the opening of its 22,000-square-foot superstore at 40 Wall Street, and he wasn’t kidding.


This story first appeared in the December 9, 2011 issue of WWD. Subscribe Today.

Duane Reade is out to reinvent the mass market beauty business and 40 Wall Street is its boldest statement yet. Housed in a former bank, the enormous vaulted space holds a hair salon, a nail bar, a virtual makeover station, in-person beauty advice 24 hours a day and, of course, products galore from a variety of hand-picked brands that span the mass and prestige spectrum. While department store stalwarts like Estée Lauder and Lancôme have yet to start selling their wares there, many high-end brands did take the plunge, a trend industry watchers expect to continue.


Said one consultant at the time of its opening, “Any prestige brand who enters this store is going to think differently about mass market beauty.”

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Change, indeed.


There was a common refrain among prestige industry beauty executives this year. Ask them to what they attributed strong first-half sales, and the answer was invariably the same: Macy’s. The department store giant hit its stride this year. Initiatives such as a reorganization of the merchant and operations sides, a laserlike focus on localizing sales, a new widespread training program and an emphasis on innovation with its Impulse Beauty concept paid off, as Macy’s continued to post solid sales gains despite the economy’s dramatic ups and downs.


When he announced the chain’s second-quarter results, chief executive Terry J. Lundgren exulted, “This was our most successful second quarter and spring season in more than a decade… All of our key strategies are working — and working in unison — to help us better understand our customers, deliver the assortments and value they want and expect, and engage them in stores, online and in mobile.” Big never looked better.


Sephora has always embraced the cutting edge, be it a brand or digital strategy, and this year it advanced its business model even further into the future with the opening of a 5,000-square-foot store in New York’s Meatpacking District. A veritable beauty wonderland, the store combines high tech with high touch. The implementation of mobile checkout, for example, eradicates the need for cash registers, while the Beauty Studio serves as a lab for what works in the service arena, offering everything from 10-minute express services to two-hour consultations. Products are merchandised by category rather than brand, and eye-catching units call out global bestsellers and unique lines. Visually, the store is stunning, from the giant video screens to a chandelier composed entirely of fragrance bottles. That’s what we call lighting up beauty’s retail scene.




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