NEW YORK — The relationship that the shopkeeper has with the store is a full-time obsession, declared Leslie Wexner, chairman and chief executive officer of the Limited Brands, at the recent WWD Beauty CEO Summit. Maybe so. But some beauty firms — L’Oréal and the Estée Lauder Cos. included — are increasingly moonlighting as shopkeepers, lured by the ability to talk directly to consumers.
“I’m convinced that certain brands should have a multichannel distribution strategy,” said Edgar Huber, president of the luxury products division at L’Oréal USA, naming Lancôme in particular. Lancôme, which is sold in department stores, has a string of four stand-alone stores.
“I would like to control the expression of the brand as much as I can, and add services,” Huber continued. “So, by logical sequence, we have to open retail stores.”
Huber said the stores create excitement and hype that benefit the department store business, too. “I don’t see why cosmetics brands don’t have the same retail structure as fashion brands,” which are sold in department stores, specialty shops and stand-alone stores. He noted that the following L’Oréal brands — Kiehl’s Since 1851, Biotherm and Shu Uemura — all take a three-pronged distribution approach of specialty shops, stand-alone stores and e-commerce.
Industry sources anticipate that Lancôme will open three to five additional locations within the next year.
On the mass side, the company has opened two L’Oréal Paris stores, which it describes as “Living Labs.” The concept was born out of a study L’Oréal commissioned about seven years ago, which found that young people were attracted by the browse-ability of specialty chains, said Joe Campinell, president of the L’Oréal consumer products division of L’Oréal USA. “The days of the customer being a single-channel shopper were over,” he said, referring to the study’s findings. Campinell commented that L’Oréal Paris’ strategy was less about retail stores and more about learning how to better compete in the mass market. “We study the interaction between skin care and cosmetics and hair color and cosmetics, and then share that information with our mass retailers,” he said. “We even host retailer meetings in our L’Oréal Paris stores.” L’Oréal Paris, which is sold in 40,000 mass retail outlets, doesn’t need more doors, said Campinell. “This is about learning how to merchandise beauty to accelerate business in the mass market.”
Origins, an Estée Lauder Cos. brand, has a 15-year track record as a shopkeeper, opening its first store in Boston’s Harvard Square in 1991. Some 125 stores later, these shops have become an integral part of the Origins business. Origins plans to open six to seven more stand-alone stores during its next fiscal year, which begins in July, said Ken Stone, vice president of retail for Origins. In July 2005, Origins unveiled a new prototype in Arlington, Va., that features a more streamlined interior, complete with terra-cotta walls and a sink. Wheeled tables and cabinetry allows for a flexible, moveable layout.
“We offer a well-edited, clear-focused vision,” said Stone, adding, “Single-brand stores speak directly to the Origins consumers.” Origins also has displays in some 450 department stores. “The consumer can choose to shop how she wishes,” said Stone. “We think it’s important to offer both” retail stores and department store concepts.
While executives from L’Oréal and Lauder said prestige brands also need to have a strong presence in department stores, Cathy J. Leonhardt, director at Peter J. Solomon Co., declared: “Everybody is trying to get out of department stores.” She added that in concept stand-alone stores are a good idea, but their sales likely don’t move the needle for large beauty firms. Leonhardt said, “The question is, do you want to create a single concept store when people tend to shop across multiple brands? Brands need to have oomph to make it work.”