MONTREAL — Joe Fresh Style, Loblaw Supermarkets’ affordable clothing line, now includes a budget-friendly cosmetics offering called Joe Fresh Beauty.

This story first appeared in the March 27, 2009 issue of WWD. Subscribe Today.

The brand has applied the same top-quality-at-affordable-prices philosophy as it does for its clothing and accessories, said Elizabeth Margles, vice president marketing, general merchandising at Loblaw, Canada’s largest retailer. The cosmetics line began rolling out to stores this month.

Loblaw has over 1,100 supermarkets across the country, but Joe Fresh Beauty will only be available in about 250 stores, primarily due to space limitations, Margles added. Although Loblaw already carries cosmetics in its pharmacy section, the retailer doesn’t believe Joe Fresh Beauty will cannibalize sales.

“It will build that category, and margins are higher in private label,” said Margles. “Joe Fresh Beauty will also be in more stores than Joe Fresh apparel, because it will be in the health and beauty section of our stores and not the (smaller) apparel section.”

“We’re offering a full range of cosmetics [of 200 stockkeeping units] that took us a year to develop,” said Margles. “We benchmarked the price against the mass market, but the quality against niche, high-end brands. We don’t put something in the store that we don’t have 100 percent confidence in and that we wouldn’t back up.”

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Most prices are in the $6 to $8 range for foundations and eye shadows, and up to $14 for brushes.

“It’s basically a brand extension of Joe Fresh Style, which is doing really well. It caters to the style-sensitive, time-sensitive and price-sensitive woman,” said Margles.

The Joe Fresh brand was introduced just over two years ago with clothing for men and women. Last year, it added a children’s line and lingerie. Although Loblaw doesn’t break down its sales by category, it’s estimated Joe Fresh has annual sales of about $500 million, well short of its $1 billion objective.

But it offers very good value, and sales are increasing each year, according to retail analyst Perry Caicco of CIBC World Markets in Toronto.

Caicco said, “Joe Fresh has become the shining star of the company and one of the few programs that is working at Loblaw. I think Joe Fresh Style will also catch on with their customers.”

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