About a 10-minute drive from its headquarters in Newport Beach, Calif., L’Oréal-owned Urban Decay is making its first move into retail with a store opening by early November at the Fashion Island shopping center.
The 1,000-square-foot store will have six makeup stations, a custom foyer, a digital video wall, wood flooring, a bathroom wallpapered in pictures of Urban Decay’s employees’ dogs and a 100-inch chandelier inspired by sconces festooned with hanging chains that the brand has in its displays at Macy’s. Although the merchandise will be similar to what’s available at Urban Decay’s wholesale partners, including Sephora, Ulta and Macy’s, the brand will also experiment with new items; dip into more shades in its eye shadow and complexion ranges, and mix in lifestyle products such as T-shirts, mugs, headphones and bags at the store.
Wende Zomnir, chief creative officer and founding partner at Urban Decay, said the brand has long considered entering retail to present the “full expression of the brand,” but was too busy growing its business at its wholesale partners to concentrate on developing a store. She elaborated that the opportunity to expand internationally — and spread freestanding stores in countries where they are appropriate for the brand — pushed Urban Decay to take a stab at retail.
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“It really felt like the right time. It makes sense for us to understand what the freestanding model would look like as we expand internationally,” said Zomnir. Tim Warner, chief executive officer of Urban Decay, added that international sales account for 20 to 25 percent of the brand’s total annual take, but that figure could increase to as much as 50 percent of Urban Decay’s revenues in the upcoming years.
“In some markets, there really isn’t a lot of department store opportunities, and freestanding stores play a bigger role. It is just another component of distribution we can deploy in a market,” said Warner. “Even in the U.K., where we are in department stores, there really isn’t an open-sell retail store that we do business with. So, if we want to do business outside department stores there, freestanding stores are really the only other opportunity.”
Urban Decay’s retail infrastructure is built upon the systems L’Oréal, which acquired the brand in 2012, has put in place. “L’Oréal has vast resources to help on the operational side. I don’t want to spend my time deciding what’s the right POS system,” said Warner. “[L’Oréal] already does stores with Kiehl’s. I can key into all of their best practices and leverage their back end, and then we can focus on how it will look on the front end.”
Warner observed that some people might think Urban Decay should open its first store in a big market like New York, but emphasized Fashion Island suited the brand because it is in its backyard, and Urban Decay doesn’t currently have significant distribution there. Additionally, the center’s busyness — it reports attracting 15 million visitors per year — and open-air setting appealed to Zomnir.
“An Urban Decay freestanding store to me isn’t a mall store. It should be more of a freestanding store, but, as you know in Southern California, it’s really hard to get foot traffic in anything that is not in a shopping mall,” she said. “So, Fashion Island fit the bill in so many ways.” Industry sources estimate the store could generate $1 million to $2 million yearly.
Zomnir and Warner underscored the store could enable Urban Decay to nurture a closer relationship with its customers. “We all have these relationships on Facebook with people we don’t know that well. To have a personal interaction with a brand or another person is really special, and a retail store allows you to speak to your customer in a one-on-one personal way,” said Zomnir. Warner chimed in, “Our own retail store is an opportunity to interact directly with the customer from a CRM [customer relationship management] standpoint. Obviously, working with Sephora, Ulta and Macy’s, those are their customers that we have there, so we never really have direct access to them. So, this is a great opportunity for us to have direct access to them.”