MEXICO CITY — MAC, which sells four lipsticks a minute in Latin America, plans to operate more than 220 doors by 2018 and grow 40 percent this year amid an ambitious expansion, the region’s vice president Victor Gomez told WWD.
“We are having an excellent year,” he said. “We have accelerated new-door openings in third cities and implemented strategies that have worked very well.”
For its 2014 fiscal year ending June 30, the Estée Lauder-owned brand opened stores in Manaus in Brazil’s jungle as well as in Uberlandia. In Mexico, it set up shop in third cities such as Oaxaca and Los Mochis while Chilean cities Antofagasta and Iquique also saw new counters.
Sales in those fledgling markets jumped 30 percent above targets, especially in Manaus where they were particularly robust, Gomez said.
Despite slumping economic growth in Brazil and Mexico, MAC remains bullish on Latin America, where it plans to open more than 20 doors this year and a similar amount annually until 2018, Gomez revealed.
Most openings will be in second and third cities in top markets Brazil, Mexico and Chile, though the brand hopes to eventually reach all of the region’s main markets.
It hopes to enter Ecuador in the near term, and it is also eyeing Bolivia and Central America (sources say Honduras and Nicaragua are on the map) as other medium- to longer-term possibilities to deepen its foothold beyond other large markets such as Colombia and Peru. Last year, MAC entered Uruguay and Paraguay and will finish this year with 152 Latin American doors in 13 markets.
Gomez said MAC is also rolling out a new store concept called Fashion Centric aimed at fashionistas with the first shop expected to open in El Palacio de Hierro’s revamped department store in Mexico City’s posh Polanco district next year. It will also introduce a São Paulo freestanding format then.
E-commerce is also in the cards with the Mexican operation expected to launch the service in coming months, Gomez said.
Of this year’s doors, 10 were freestanding shops and 15 shop-in-shops in El Palacio and in rival Liverpool, where the brand has focused its multiretailer expansion.
Brazil was the site of a higher percentage of freestanding outlets, though MAC does operate counters in multibranded perfumeries and airport duty-free shops.
Despite the expansion, this year’s trading looks less buoyant.
Gomez expects 2015 fiscal sales will rise at a rate of 20 to 30 percent.
The company will also have to fend off other aggressive competitors such as Brazil’s O Boticário and L’Oréal, which are rushing to win consumers’ hearts.
To boost its fortunes and thwart rivals, MAC will lift spending to train sales staff (an activity which took 6,500 hours this year, double the 2013 levels) as well as in marketing, the bulk of which goes to makeup artists’ promotional events and diverse cultural outings. In 2014, such activities saw spending leap 25 percent as the firm was the official makeup brand for 40 shows in São Paulo Fashion Week and participated in 20 Mexican fashion events, notably a Carolina Herrera show last autumn.
MAC will continue to stand apart through celebrity endorsements, Gomez said. He added that of the 90 Brazilian personalities who endorse the line, some are soap opera starlets who use the products. It also does global celebrity collaborations, with the latest iterations featuring a partnership with Brazilian makeup artist and blogger Julia Petit and a similar global collection with Brazilian fashion designer Pedro Lourenço last year.
Like others, the company is also jumping into the social media circuit where followers have grown as much 25 percent year-on-year to 1 million. Underscoring Latin America’s importance for its business, Brazil and Mexico boast the largest followers after the U.S.
Good business strategies will also be paramount.
“Every day, our brand demands are bigger,” Gomez said. “We have to evolve with the consumer. We are constantly defining strategies and working to have the best retail locations. We are also looking to do the best training, offer new professional services and store formats.”
MAC will also maintain its “all races, sexes and ages” marketing slogan to draw consumers to its shops. The motto has helped the brand attract multiethnic consumers who have taken well to a broader color palette than more mainstream brands.
Gomez said Latin America is MAC’s fastest-growing emerging market, accounting for as much as 8 percent of global trade. Brazil is the firm’s number-four market, though when counting Brazilians traveling abroad, it is number two. Mexico ranks in the top 10.
MAC hopes to lead the region’s prestige beauty market next year, extending its stronghold beyond high-end makeup to skin care and other categories, Gomez said. Currently, it has 51 percent of the region’s prestige market.