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SEPHORA ON TRACK

WWD September 11, 1998 | Diamond, Kerry; Born, Pete Within weeks of opening its first U.S store, Sephora passed its first test by beating the July plan. That puts the 8,100-square-foot SoHo store on course to meet the previously stated first-year sales objective of $10 million.

The initial sales results were no surprise for the innovative French perfumery chain, which landed on these shores with ambitious expansion plans.

When Sephora opened at 555 Broadway on July 16, the chain’s arrival was cheered by manufacturers, particularly the smaller, more esoteric brands that have a hard time gaining space in department stores.

Sephora’s initial sales breakdown reflects this constituency, as well as the trendy, more sophisticated tastes of the average SoHo shopper.

According to store executives, these are the following best-selling items — by stockkeeping unit, not by brand — in fragrances during the month of July.

The top-selling stockkeeping unit in women’s fragrance was the 1.7-oz. L’Eau d’Issey by Issey Miyake, followed by the 2.5-oz. Bulgari Black, the 1.7-oz. Bulgari Eau Parfumee, the 1-oz. Gucci Envy, the 3.4-oz. Bulgari Petits et Mamans and the 1.7-oz. Annick Goutal’s Eau d’Hadrien.

In men’s fragrance, leaders were the 3.4-oz. Paco Rabanne Energy, the 2.5-oz. Jean Paul Gaultier Le Male, the 2.5-oz. L’Eau D’Issey Pour Homme, 4.2-oz. Dolce & Gabbana Pour Homme, 3.4-oz. Calvin Klein Eternity for Men and the 1.6-oz. Eau d’Orange Verte by Hermes. here sephora coupon code

Sephora classifies its nonfragrance brands into three categories: traditional makeup, treatment and fragrance houses; cutting-edge color cosmetics, and products devoted to promoting a sense of well being.

The best-selling brands in the first category for July were Shiseido, Lancome and Clinique, according to the store. The leaders in the second classification were Stila, Benefit and Vincent Longo, with Hard Candy placing fourth. The top sellers in the well-being category were Peter Thomas Roth, Decleor and Naturopathica.

Considering Sephora’s strong fragrance orientation in France, SoHo did surprisingly well in traditional color and treatment, which generated more than 50 percent of the store’s volume. That, according to executives, beat plan by 30 percent. The Sephora private label products accounted for less than 20 percent of sales and fragrance the remainder.

After studying these results, Sephora’s management raised the targets for color and treatment for the second U.S. store, located in Miami’s Coconut Grove, which was due to open Sept. 3. Other openings include: University Village in Seattle, in early October; South Coast Plaza in Costa Mesa, Calif., in mid-November; West Farms Mall in Hartford, Conn., in early November; San Francisco’s Stockton Street, in late November or early December, and Miami’s South Beach and Ala Moana in Hawaii, both in February.

Due to the heavier than anticipated traffic in the SoHo store, more support staff was added to run cash registers and do general housekeeping chores. Executives decided to replace the carpet because the first one showed dirt too easily. Shelving components and tester supports were strengthened and the pace of merchandise deliveries from Sephora’s Baltimore distribution center was accelerated.

Like other manufacturers, William Lauder, president of Estee Lauder’s Clinique division, gave high marks to Sephora for replicating the look and feeling of the chain’s flagship on the Champs-Elysee in Paris.

“From a ranking standpoint, we are meeting or beating our expectations for the first five or six weeks,” he said, noting that by late August, Clinique had become the best-selling color and treatment brand.

His “biggest reservation” is with Sephora’s “extraordinarily aggressive expansion plan” that calls for opening 30 to 40 doors next year. Some, like Coconut Grove, could mean plus business for Clinique, but “I have less enthusiasm for a place like South Coast Plaza, where I already have four or five points of distribution.” Arie Kopelman, president and chief operating officer of Chanel Inc., questions whether Sephora can provide the presentation and the special service that are normally required to sell skin care. Chanel’s fragrances are sold in all Sephora doors so far, but not its color and treatment. “We have a wait-and-see attitude,” he said.

Robert Brady, president of Christian Dior Perfumes Inc., said it is difficult to draw general conclusions about a Sephora opening in SoHo because the neighborhood produces shoppers that are “edgier and more avant-garde” that the average department store shopper. As a result, the cutting-edge brands would do better, which indeed is the case. here sephora coupon code

The better question, he said, is what will happen when Sephora goes head-to-head with department store anchors in a regional mall? Which vendors will stick with the French chain despite their relationship with the nearby department stores, and how will those stores do?

Brady also suggested another possibility: Going into strip centers instead of regional malls to avoid confrontation.

“Everyone wants to see how Sephora will fare against competitors with gift-with-purchase promotions,” said Marjorie Wollans, president and chief executive officer of Guerlain.

“We are enthralled [with Sephora],” said Fernando Aleu, chairman of Compar. He pointed out that not only was Paco Energy the top-selling men’s sku for July, but the Carolina Herrera 212 fragrance collection placed number four. Sources confirmed that the collection had broken into the top five in July, but has since settled into the top 10.

Nevertheless, Aleu pointed out that Sephora provides a much-needed home for smaller brands. “They give the second-tier brands an opportunity.” Diamond, Kerry; Born, Pete