Why is Sephora the best makeup store

Luxury group - the cosmetics chain Sephora opens its own stores in Switzerland - but the make-up market has been shrinking for years

The cosmetics chain Sephora opens its own stores in Switzerland - but the make-up market has been shrinking for years

The cosmetics specialist from the luxury group LVMH has previously relied on shops in the Manor branches. Sephora is now expanding without the previous partner. The department store chain still has a say.

The Swiss dig deep into their pockets to look good. Almost 50 percent more sales per capita than in Germany are generated in this country with cosmetic articles. The cosmetics chain Sephora, which belongs to the French luxury group LVMH, now wants to secure a larger share of this market. To do this, she is breaking new ground.

So far, Sephora has been present with 25 shops within Manor's department stores. This model is known as “shop-in-shop” and is also implemented by other brands such as beauty competitor Mac. The cooperation agreement with Manor has enabled Sephora, which operates over 2,600 stores worldwide, to quickly gain a foothold since entering the Swiss market in 2016.

Sephora wants to expand further

But now Sephora is emancipating itself from its department store partner. On September 10, the chain will open its first store in German-speaking Switzerland in the Sihlcity shopping center in Zurich. A few months ago, Sephora took the same step at the Center Balexert in Geneva.

It shouldn't stop at these two stores. "We are looking for further opportunities to grow and expand where we are not yet present," says a Sephora spokesman. This is not a rejection of the “very valuable” partnership with Manor. "We will continue to expand this in the years to come." The company's own stores are an addition: "Both models help each other and strengthen the brand and its position in Switzerland," said the spokesman. The new shop in Zurich is intended to increase brand awareness in the area in the south of the city.

Conditions remain secret

The offensive follows after Manor announced the cut of nearly 500 jobs in August. For now, the department store does not expect further closings of department stores and thus Sephora boutiques. At the beginning of the year, however, Manor closed the branch in Bachenbülach ZH. Manor had to involuntarily give up its flagship on Zurich's Bahnhofstrasse due to the termination of the tenancy. Since then, Manor has been operating a Sephora store in the nearby main train station as a replacement.

Manor does not provide any details about the contract with Sephora. The chain is free to open its own stores, says a spokesman. But that must be done in consultation with Manor. Manor keeps a low profile on the terms. Sephora does not seem to have been imposed too strict requirements: the distance from the Sephora store in Sihlcity to the next Manor branch is less than three kilometers.

The cosmetics market is shrinking

Having your own stores is crucial in the Swiss cosmetics market. Growth is almost only possible through market share gains. The turnover in the industry has been shrinking for years. According to the Swiss Cosmetics Association, it was CHF 1.9 billion last year - 2.3 percent less than three years earlier. With “decorative cosmetics”, ie make-up products, sales totaled CHF 310 million last year. That is over 12 percent less than in 2016.

However, own stores are important for another reason: Cosmetic products are the only ones that are mainly bought in stores rather than online by younger customers. A spring poll by Bank Piper Jaffray showed that 90 percent of teenagers in the United States would rather buy cosmetics in stores than online. A countertrend is not in sight. There is no way around physical presence to reach this target group. In the USA, Sephora is one of the favorite brands of young women, along with Ulta, which is not present in Switzerland.

In this country, the retailers Migros and Coop with their specialist formats, the German cosmetics chain Douglas with 10 branches and the Italian chain Kiko with 21 branches in the make-up business are strongly represented. The range also includes these from the perfumery chain Marionnaud, the drugstore chain Müller or Globus.