• Olivier Moingeon

W49 - Sephora, De Beers, Barneys, Louis Vuitton, Ulta and more!



1. Kohl’s Sephora partnership

2. BoF McKinsey State of Luxury

3. De Beers set of sustainable goals

4. Bankruptcy: TopShop owner enters administration. Debenhams department stores shut down

5. Investments: Function of Beauty + Hodinkee + Supergreat

6. Barney’s reopening in 2021

7. Louis Vuitton $60K bespoke fragrance

8. Ulta quarterly results

9. L’Occitane half year results

10. Tiffany Store Openings at South Coast Plaza

One. A major beauty partnership was announced this week between Sephora and the American department store chain Kohls. 200 Sephora stores will open at Kohls by the Fall of 2021. Each shop will be about 2,500 sq ft and carry more than 100 beauty brands. Regarding eCommerce, the Beauty section of Kohls.com will be redesigned to exclusively feature Sephora brands. This long-term partnership will continue to expand and Sephora plans on having 850 stores by 2023, which means that there will be a Sephora outpost in 3 out of 4 Kohls stores. If you remember, 3 weeks ago a partnership was announced between Ulta and Target and I predicted that we would see more super powers forming that type of omnichannel retail alliances around big box retailers. At a time when most distribution channels are saturated and customers are increasingly valuing convenience, finding new revenue streams becomes the name of the game.

The benefit for Kohls is to attract a new and younger clientele by offering a prestige beauty experience. For Sephora and the brands they carry, the benefit is to gain access to 65 million customers who shop at Kohls around the US.


Two. Business of Fashion and McKinsey released their annual State of Fashion report, for the 5th consecutive year. In short, fashion companies are expected to post a 90% decline in economic profits in 2020 vs a 4% rise in 2019. The report offers 2 potential scenarios for the immediate future. The first one, called “Earlier Recovery”, is a more optimistic forecast predicting a decline between zero and 5% in 2021 compared to 2019. Fueled by positive macro-economic and external factors, the industry would go back to its pre-pandemic levels by the 3rd quarter of 2022. The 2nd scenario, called Later Recovery”, predicts that sales forecasts would decline by 10 to 15% in 2021 compared to 2019. In this scenario, the virus would not be contained as expected and would continue to profoundly disrupt the global economy. Sales would return to pre-pandemic levels only in the 4th quarter of 2023.

In both scenarios, the report states that 2021 will continue to see difficult conditions, at least in some geographies, and that a high level of bankruptcies, store closures and job cuts can be expected. We can also expect to see major trends accelerating, such as the digitalization of the industry, and consumers expectations that brands to take a stand on sustainability, fairness and social justice.

The report also suggests a path forward for companies, encouraging them to identify and focus on their bright spots, and to manage change with flexibility and agility.


Three, In jewelry, De Beers Group announced the launch of an ambitious initiative called Building Forever Goals, through which it is committing to achieve 12 goals by 2030, covering a wide range of environmental and social issues. Here are some of these objectives:

First, De Beers will provide the origins and impact of every diamond it discovers and sells. It will also develop and abide by a set of ethical, social and environmental standards across its mining activities. It will also become carbon neutral, reduce its water consumption in half and have a net positive impact on biodiversity by 2030. The jeweler also plans on achieving gender parity across its workforce.

The group has actually been a pioneer in reducing carbon footprint through the launch in April of their Carbon Vault program. This experimental research programs aspires to trap and store carbon into a special kind of rock, called Kimberlite, which is the rock where diamonds are formed. The announcement of this great initiative comes a week after a report from Human Rights Watch showed that 15 handpicked jewelers had made progress in the past 2 years but that their efforts were not enough to curb the industry’s impact on certain communities and the planet.


Four. A troubled week for British retailers. It started with Arcadia Group announcing they will enter administration. Under this bankruptcy type of protection, they will continue to operate while trying to sell their brand assets. 13,000 jobs are at risk. The crown jewel of the Arcadia empire is Top Shop which is already rumored to be the target of acquisition by rivals such as Boohoo or Fraser’s Group. Arcadia’s struggles are not new and the group had already eliminated 500 jobs and closed multiple stores before the pandemic. Topshop once was the darling of the fashion world, but failed to remain relevant and ultimately lost market shares to online rivals and fast fashion giants.

The gloomy week did not stop there as department store Debenhams announced that they will permanently close their 124 U.K. locations as well as their online store. Debenhams is 242 years old and Britain’s largest department store chain. It entered administration Last April for the 2nd time in 13 months, but this time it will not come out of bankruptcy as it failed to find buyers. It directly puts at risk around 12,000 jobs.


Five. On the Investment side, there has been 3 important announcements this week. first, customized beauty brand Function of Beauty received a $150m minority investment from Private Equity giant L Catterton. The investment will help accelerate product development, global expansion beyond the 45 markets they are already in, and continue to build on their advanced customized manufacturing capabilities. Function of Beauty was founded in 2015 and started as a customized haircare line, before expanding to body and morest recently skincare. They had raise a $9.5m Series A in 2017.


In watches, watch website Hodinkee raised a $40m Series B, with LVMH as one of the investors as well as celebrities Tom Brady and John Mayer. What started 14 years ago as a small watch blog, turned over the years into one of the top destinations for watch aficionados and a well respected brand in the industry. The investment will be used to accelerate both content and ecommerce retail sales, under the helm of a new CEO, Toby Bateman, who is joining Hodinkee from Mr Porter. Ben Clymer, founder of Hodinkee, will remain on the board as Executive Chairman.


Finally, the beauty review website Supergreatraised a $6.5m Series A this week. The app is community based and allows users to review, shop and share tips on their favorite beauty products.


Six. A great news on the department store front, with the announcement that Barney’s New York will make a comeback, by reopening 2 locations by the fall of 2021. One will be at Saks Fifth Avenue and the other one will be in Greenwich Connecticut. Barneys filed for bankruptcy in 2019 and was acquired by Authentic Brands Group, which ultimately closed all the locations in the US. The new owner licensed the Barneys brand to Saks Fifth Avenue, and while there are no detailed plans at the moment, we can expect Saks to continue developing the Barneys brand in the US. While all Barney’s stores in the US have been closed last year, Authentic Brands Group still operates 6 Barney’s stores in Japan and the they plan on expanding the footprint in China and Korea in the next 2 years. The restaurant Fred’s will also reopen, but we don’t have further details at the moment.


Seven. In the world of perfume, Louis Vuitton launched a 60,000 euro bespoke fragrance service. For that price tag, you get to work with Vuitton’s master perfumer, Jacques Cavalier Belletrud, to create your own unique perfume. It will be delivered in a personalized LV trunk, containing 3 bottles of 200ml, 4 bottles of 100ml, a travel leather case and bottle, as well as 16 refills. The formula will be forever kept in the Maison’s archives.

Still in the fragrance world, Cartier


Eight. Ulta announced in their 3rd quarter report that sales declined by almost 8% and earnings declined by 42%. In terms of value, sales reached 1.6 billion dollar for the quarter, down by $100m compared to the prior year.

Interesting fact is that the number of transactions fell but the average ticket increased by 7.6%, which shows that some customers have either stopped or reduced the frequency of shopping but those who still

shop are spending more than what they used to.

The company continued its retail expansion with 17 new stores opened in that 3rd quarter alone, to reach a total of 1,262 stores in the US.


Nine. L’Occitane International reported a sales decline of 15% in the first half of their 2021 Fiscal year, ending in September, and a 21% decline in operating income. Asia was the only region showing positive results, with sales in China increasing by 27%. The US market declined by 15% but remained the number one region for the group. Online sales skyrocketed with an 81% increase vs prior year. The group announced that it will continue to face challenges and might cut 300 jobs out of its 9,000 people workforce. If we look at individual brand performance, L’Occitane’s sales declined by 15%, Elemis by 23% and all the other brands declined, except LimeLife, the he cosmetics and natural skincare brand, which posted a 33% sales increase despite the pandemic,


Ten, a few store openings: Tiffany is opening a Blue Box Cafe at the high end South Coast Plaza shopping center, located in Orange County, south of Los Angeles. This will be the first permanent food outpost for the brand on the west coast. It will serve 45 guests and offer the same menu as the New York City Location. The cafe will be located in the newly renovated 12,000 sq ft Tiffany boutique, which is the 2nd most productive store after New York City. Talking about NYC, the flagship store is still undergoing a renovation, and is slated to reopen in the fall 2021. Cartier launched an ephemeral boutique concept in Sydney Australia, called The Cartier Box. The pop up will open for 88 days, and featuring all product lines, from jewelry, to watches, accessories, eyewear and fragrance.


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