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WASHINGTON — CVS Pharmacy took its first step upmarket on Monday, lifting the curtain on its high-end beauty store, called Beauty 360.

This story first appeared in the November 5, 2008 issue of WWD. Subscribe Today.

The first Beauty 360 concept opened here in Dupont Circle adjacent to a CVS Pharmacy. Some 500 more are slated to open over the next several years, with a second store scheduled for early December in Mission Viejo, Calif, said Larry Merlo, CVS’ president of retail.

Inside the store — which is awash in white with brushed-steel accents and a prominent wall of sea foam-colored, hand-cut glass tile — are a host of brands with a more prestige positioning than CVS’ typical mass market assortment. Many of these brands are staples on TV shopping networks, with Laura Geller makeup, Borba and Perlier among them.

Additional brands in the assortment include Paula Dorf cosmetics, Freeze 24-7, Ahava, Fushion Beauty, Dr. Brandt, ModelCo, StriVectin, blinc cosmetics, Talika, Supersmile, Pop Beauty and Bloom Cosmetics, as well as several newer brands, including Canyon Ranch skin care and It Cosmetics. Fragrance walls are stocked with brands from P&G Prestige, Coty Inc. and Clarins.

The Beauty 360 units, each complete with a treatment room, also will offer beauty services such as manicures, express facials and makeup application.

CVS’ bold upscale beauty strategy is similar to a format by its northern neighbor, Shoppers Drug Mart, which carries a bevy of luxury ranges, including Clinique, Lancôme, Clarins and Dior. But absent from CVS’ effort are department stores’ long-held brands (Estée Lauder, Lancôme, Dior, Clinique, Elizabeth Arden cosmetics). Instead, the CVS concept presents smaller, niche lines, and offers them the potential of a 500-plus store footprint and a steady stream of foot traffic. Some four million customers traipse through the drugstore daily, according to the company.

Just beyond a breezeway that connects Beauty 360 with the CVS store here, Mike Bloom, CVS’ senior vice president of merchandising, said of the first couple store openings: “We’ll perfect the model and make sure it performs” before rolling out the concept more aggressively. He said that the effort likely will start in earnest along the West Coast, where CVS has bolstered its presence with its recent acquisition of Longs Drugs. The regional drugstore chain brings CVS’ total store count to about 6,800 units, and the plan is to outfit a number of the acquired stores with the Beauty 360 concept when the remodeling program begins in February, said Bloom.

Bloom added that he expects the first two stores will garner interest from more brands, which could potentially be included in future stores.

This particular store is situated on Connecticut Avenue, blocks away from two established beauty boutiques, namely Douglas and Bluemercury, which opened its first high-end apothecary here a decade ago. The Beauty 360 concept will also go head-to-head with Space NK, Sephora and Ulta, the mass-prestige hybrid retailer that has spent the last eight years aggressively courting high-end brands.

When asked what CVS’ Beauty 360’s competitive edge will be — particularly as Ulta, Bluemercury, Space NK and Sephora continue to increase their U.S. footprints — Bloom, as he has in the past, declared: “Convenience.”

“Nobody can replicate our real estate. We are convenient and that’s what the shopper wants.”

A number of vendors were on hand at Monday’s store opening, including Paula Dorf, founder of the namesake cosmetics line that also is sold in Bluemercury, Ulta and spas. Dorf said the concept offers a “built-in customer,” given it’s attached to a CVS store. Brushing aside economic concerns, she said women will continue to buy makeup to boost their spirits. “Powder and paint make you what you ain’t,” she quipped, quoting her grandmother.

Makeup artist Laura Geller, who frequently appears on QVC, said, “CVS’ shoppers are everybody. On air, I reach 90 million customers, but I don’t get to touch them. With CVS, I’m interacting with more of my clients.” She added, “You could walk in while waiting for your prescription, get a makeover by a beauty consultant in two seconds and walk out looking phenomenal.”

Scott-Vincent Borba, who worked at Neutrogena prior to creating his eponymous nutraceuticals line, said CVS’ prowess in mass market beauty enticed him to participate in the concept. “I’ve seen the year-over-year growth that CVS has achieved on the mass side. For an indie brand like mine, to get four million in foot traffic is unheard of,” said Borba, who also sells his products in Fred Segal and on QVC.

Mary Lou Gardner, CVS’ senior category manager for beauty, who is leading the Beauty 360 effort, said, “This model provides a convenient destination where women can feel good for a little bit of money….Our foot traffic doesn’t slow down due to the economy.”

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