Beauty chain Sephora is the latest business in the recent wave of international retailers to announce it’s coming to Australia, with the brand expected to provide competition to low-cost beauty retailers like Priceline.
The world’s largest beauty retailer has reportedly spurned offers from department stores Myer and David Jones and chosen to open stand-alone stores in Australia next year, according to The Australian Financial Review.
Sephora is the fastest growing brand within the LVMH group, which includes other brands such as Louis Vuitton, Givenchy and Bulgari.
The Australian Financial Review reported last night Sephora is planning to open its first store in Sydney in the first half of 2015.
It is expected to then rollout stores in other capital cities in high-profile locations like Sydney’s George Street and Pitt Street.
Sephora is also rumoured to be in discussions with Westfield.
Acquired by LVMH in 1997, it has more than 1400 stores in 30 countries and is known for its quality customer service and wide-range of international beauty and skin care products.
The company was first founded in 1969 and has since become the dominant player in the European market, as well as capturing a large portion of the United States cosmetics market.
Retail Oasis director Nerida Jenkins told SmartCompany the opening of Sephora in Australia is the “next inevitable step” in international retailers expanding to Australia.
“It’s good to see this trend extending beyond fashion and into other discretionary categories. Sephora carries a similar brand awareness as Zara and H&M,” she says.
“Thinking back to when these international retailers first started to hit Australian shores, the whole retail market was stimulated. I think there will be a similar market response to Sephora as there was to Zara.”
Jenkins says if Sephora has an aggressive expansion in Australia, it will challenge local cosmetics retailers.
“There hasn’t been much innovation in this space for a very long time,” she says. “It’s stores like Priceline which will be most at risk.”
But Jenkins says the opening of international retailers in Australia gives consumers a reason to go back into stores.
“Department stores have dominated the premium end of the market, while stores like Priceline dominate the lower end… If Sephora just has flagship stores, it will probably stimulate interest in this high discretionary category.”
Jenkins says overall the movement of Sephora into the Australian market will be positive.
“Looking at the retail stats for apparel, over the last three years it’s been a tough time, but since the dollar dropped last year local fashion spend has been increasing close to double digit numbers,” she says.
“There are a lot of consumers out there spending and coming back to the local market. Sephora is a great brand and it will bring competition to brands like Priceline, but I think the market can sustain another competitor.”