CARS HOMES JOBS

Kohl’s targets cosmetics

Thursday, August 22, 2013
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I never was initiated into the ritual of the department store cosmetics counter.

My mother never took me as a tween or teen to Macy’s, for instance, to perch on a stool for study by a white-coated sales consultant, who then offered suggestions on products for my skin type and color.

So today I’m more a grab-and-go gal, content with whatever is hanging in the grocery or drugstore aisle.

But the so-called “prestige beauty” industry — skin care, makeup and fragrance products carried primarily in U.S. department stores — is a business juggernaut, with first-half sales of $5 billion this year, according to The NDP Group, a Long Island-based consumer market research firm.

Karen Grant, the company’s vice president and senior global industry analyst, reported the number is up 8 percent from the January-to-June period last year, an increase due primarily to higher prices. “This tells us that while consumers may be cutting back in spending, they are continuing to invest in value, even when that may be at higher prices,” she said.

The cosmetics counter no longer is the sole province of Macy’s or Bloomingdale’s, though.

Walter Loeb, a longtime retail analyst who now pens a column for Forbes magazine, remembers when they formerly occupied prime floor space at the department store entrance, due to the high-caliber brands they carried. But then along came the likes of Sephora, part of Paris-based luxury retailer LVMH, which broke the department stores’ hold on name brands.

Now, Sephora is nipping at the heels of U.S. cosmetics sales leader Macy’s, according to Loeb.

And Sephora is not alone. Another chain, Illinois-based Ulta Beauty, is quickly adding 10,000-square foot stores that offer an array of prestige, “mass” (as in drugstore) and salon products.

That made me wonder what Kohl’s has in mind with its “beauty testing.” Executives with the mid-tier department store company talked a bit about the initiative during a conference call with analysts last week, but offered few specifics. They said Kohl’s would be testing for assortment, square footage and location within the store for cosmetics in about 150 stores this fall.

“We believe we’re significantly underserving our customer in this multibillion-dollar market,” CEO Kevin Mansell said in the call.

He told analysts he would not talk in detail about the tests, but offered, “I fully expect to be able to say that we’ve identified the best way forward, and the new stores that we’ll roll out next year. We’re going to be rolling out a lot more beauty stores next year — we’ll incorporate all of those changes.”

At one local Kohl’s store, several counters are devoted to makeup, skin care and fragrance near women’s accessories and jewelry. Products are there to be sampled, as evidenced by mascara wands and makeup brushes at the ready; tubes of lipstick appear to have been used over and over again by customers.

I wondered whether this self-service strategy would continue or whether white-coated sales consultants might be in Kohl’s future. (Mansell’s reference in the conference call to “a different labor model in the test stores” was not explained but made me think of them.) I also wondered how Kohl’s would size up the competition from Sephora and Ulta.

But, alas, my call and emails to a company spokesman were not returned, so I’m still wondering.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at marlenejkennedy@gmail.com.

 
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