International Courts Must Reach Out

SEPHORA SET TO BOW IN N.Y.

WWD April 10, 1998 | Born, Pete NEW YORK -- The French perfumery giant Sephora is hatching plans for a new American revolution.

With talk of empowering consumers through knowledge and liberating them with the freedom to experiment and choose among a vast array of products, Sephora executives are laying plans to transplant their bright and playful self-service merchandising approach to New York. The first Sephora store here is set to open by early summer. sephoracouponcodenow.com sephora coupon code

And that's just the beginning. For Sephora, first it's New York, then the world.

At least that's the strategy articulated by Howard P. Meitiner, president and chief executive officer of Sephora Americas/Asia/Pacific, the DFS Group subsidiary charged with replicating the beauty chain's French success through the Western hemisphere and outside of Europe.

Flanked by Steve Bock, executive vice president of merchandising and marketing, and Sherry Baker, vice president of international marketing, Meitiner sketched preliminary ideas on how Sephora's merchandising manifesto can be translated in the Americas and Asia-Pacific.

A key move will be establishing a New York flagship, measuring as much as 20,000 square feet, that Meitiner says could serve as springboard for expansion. Referring to the 14,000-square-foot Paris superstore on the Champs-Elysees that established Sephora's reputation internationally, Meitiner declared, "Champs-Elysees presold Sephora to America, and we want New York to presell it to the world." The Sephora executives said that manufacturers at the recent duty-free exhibition in Orlando, Fla., told them that what Sephora needs to succeed internationally is major stores in Paris, New York and Miami.

The first site in SoHo is still not signed, so the address was not disclosed. But even though the site, measuring about 9,000 square feet and serving as the lead store this summer, is obviously considered key, it is not the flagship that, as Bock said, "will project our image to Latin America and the Far East." That will be another location among the four or five stores that Sephora could have inside New York.

There are three basic formats: The flagship size, ranging from 9,000 to 10,000 square feet and upward, an average unit of 4,500 to 5,000 square feet and a new model that Daniel Richard, the president and director general of Sephora in France (see related story, this page), is developing. Bock described it as "Sephora lite": a store that will measure 2,500 to 3,000 square feet.

Meitiner described the new, smaller stores as being developed for a neighborhood in a city, for example, that is important but does not generate the volume base to support a full-sized store.

In Paris, Richard is at work developing not only store formats, but merchandising ideas and products -- including the eye-catching Sephora house brand -- as well as running Europe. Meitiner described him as "the caretaker and owner of the Sephora concept." Meitiner's team, based at the DFS headquarters in San Francisco, has the responsibility of adapting the concept to meet the needs of foreign markets.

For instance, fragrance is far more important in France, where it reportedly accounts for nearly 60 percent of sales in the Champs-Elysees store, than in the U.S.

Conversely, color cosmetics -- particularly makeup artist brands -- have greater currency with Americans than with the French. And skin care is an area that also is being strengthened for the U.S. go to web site sephora coupon code

Bock said, "Where there were perceived weaknesses, we have worked hard to strengthen those areas." Meitiner sketched the preliminary vision for the Western hemisphere development. The company plans to start in the U.S., then expand to Asia and South America.

Plans call for opening 14 Sephoras in the U.S. this year, he said, adding that sites are being sought both in malls and on street locations.

In the second year, Sephora plans to expand into Japan, South Korea and one Latin American market, probably Brazil. And by next year, the company hopes to have more than 40 stores open.

By the year 2002, the door count is expected to reach 180 to 185 outside Europe, with a possible total volume of $1 billion, depending on the productivity of the locations.

In 2004, the global total -- including Europe -- could hit 600 stores, Meitiner estimated. Turning back to the U.S. and the starting point in New York, Meitiner said sites are being examined in the city's Flatiron district, Times Square and other parts of Manhattan. Bock had no comment on speculation about Rockefeller Center.

Outside New York, Sephora is closing in on Miami -- with sites in South Beach and Coconut Grove -- and looking at Washington's Georgetown section, Boston, Chicago and New Orleans. Two stores are envisioned in Los Angeles, with the same number in San Francisco, two or three in Las Vegas and one in Hawaii.

Meitiner said he expects sales to average at least $1,000 a square foot and most stores to turn profitable within three years.

The Sephora concept -- as pioneered by former president Dominique Mandonnaud -- is anchored by four "convictions":

Customer Freedom: "Customers are free to go in there and do what they want [such as dabbling in the multitude of product testers]," Meitiner said, noting that there will be no hard sell. "We will resist the temptation of doing gift-with-purchase and purchase-with-purchase promotions, and our salespeople do not sell, they provide information." Bock added that the sales associates will be experts, not only in fragrance and color, but also in skin care.

In a further departure from department store practice, sales associates will not be paid on a normal commission basis tied to their sales tallies. Bock said they will be paid a salary and rewarded at the end of the year, based on how well the store has done.

Cultural Awareness: One characteristic of Sephora is a sense of celebration of global culture, as evidenced by special promotions. As an example, Meitiner suggested a possible exhibition of Aboriginal culture from Australia. Baker also mentioned a show on Masai costumes. Bock also talked about diversifying the product assortment to include shades appealing to women of color.

Primacy of Beauty: Mandonnaud, who sees himself as an artist and had "sculptor" printed on his business card, took esthetics into account in doing everything from picking products to shopping bags. The store's ambience and product mix are calculated to enhance customer self-confidence and sense of well-being.

Drive to Innovate: The retail world is so competitive and fast paced that the company must keep evolving to stay ahead of the pack, since every new idea is quickly adopted by the competition. "We have a saying at Sephora," Meitiner said, "If it works, change it." While the merchandise assortment is still being studied, it will consist of prestige products with manufacturer-suggested pricing, like in department stores, the executives said. But that is where the similarities end. A dramatic difference will be the absence of gwp's, a department store workhorse.

Bock explained that Sephora's appeal will be in its playful environment. "Consumers will want to come into Sephora for the freedom of choice and the shopping experience," he said, asserting that the store will appeal to many customers who now are not buying cosmetics in department stores. "The potential to expand the prestige cosmetics market is huge." There will be some overlap with the competition, he acknowledged, "but I think the majority of the customers we are going to cater to will be a new audience.

"No gifts, no pwp's, no gwp's, no catalogs, no spritzers and no spiffs. Because of that, we will cater to a different customer," he continued, "who enjoys the shopping experience we offer." Although negotiations have not been concluded with vendors, there have been some initial reactions.

One came from Leonard Lauder, chairman and chief executive officer of Estee Lauder Cos., which commands 44 percent of the U.S. prestige market.

Lauder will open with Sephora "on an experimental basis" with the Lauder, Clinique and Aramis/Tommy Hilfiger brands in the SoHo, South Beach and Coconut Grove stores, he said, asserting that "we believe Sephora has good potential for success in non-mall locations, where it will not have to go head-to-head with department stores.

In mall locations," he continued, "it is unclear what lines will go into Sephora and how they will perform vis a vis department stores." Born, Pete