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Could a Department Store Take on Sephora?

Following the overhaul of what will soon be a 90,000-square-foot beauty section, Harrods is readying to open a network of standalone beauty stores.
A rendering of Harrods' H Beauty | Source: Courtesy
By
  • Rachel Strugatz
BoF PROFESSIONAL

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NEW YORK, United States — There is K-beauty, J-beauty and come spring, there will be H Beauty.

Harrods is opening its first standalone beauty stores, on the heels of its reported £200 million overhaul of its London flagship’s beauty hall. The two locations, a 23,000-square-foot space in Essex and a second in Milton Keynes, will have dedicated sections for makeup, skincare and fragrance, plus blowdry and facial services. There won’t be a K-Beauty-style 10-step routine, but there will be a “coffee to cocktail” bar and the ability to pick up and try on purchases from harrods.com.

“Nobody is delivering that beauty specialist experience in the UK at the moment with authority,” Annalise Fard, director of beauty, accessories, fine jewellery and watches at Harrods, told BoF. “We’re missing the beauty specialty retail proposition.”

That’s not just hype. In the UK, there is no equivalent to Sephora or Ulta Beauty, which have blanketed US malls, high streets and suburban shopping centres with roomy stores packed with the buzziest creams, masks and oils.

The closest British equivalent, Space NK, only has about 71 locations, while Boots and Debenhams are everywhere but lack the elevated trappings of a Sephora or Ulta’s ability to guarantee the latest influencer brand has a big launch.

“Consumers have wanted something that’s not just Space NK,” said Millie Kendall, chief executive of the British Beauty Council. “There has been no competition.”

So what does H Beauty mean for Harrods?

In the short term, H Beauty does two important things. It breathes life into a feeble beauty retail scene in the UK, and potentially puts Harrods at the centre of it. Standalone stores will also make Harrods even more desirable as a distribution partner, giving the department store an edge in securing exclusive rights to brands. Would Fenty Beauty have chosen Harvey Nichols as its UK retail partner in 2017 if Harrods could have put Rihanna's 50 shades in front of customers not only in its flagship beauty hall, but in specialty stores around the country? Would Pat McGrath Labs have gone with Selfridges?

Consumers have wanted something that's not just Space NK.

Others have tried the specialty concept. In 2012, Harvey Nichols opened Beauty Bazaar in Liverpool. The 22,000-square-foot, three-story space carries lines like Anastasia Beverly Hills and Tom Ford Beauty, and offers a multitude of services and treatments. However, the concept has remained a one-off.

A spokeswoman for Harvey Nichols said there are no plans to open additional beauty doors right now. Selfridges declined to comment.

Harrods’ has a strong brand with a 170-year heritage that’s not only made it a London shopping institution, but a main tourist attraction for international travellers. Any new store concept is sure to generate media attention at a global scale, especially beauty, a proven entry point for luxury shopping.

“There’s not many brands like Harrods. They’ll launch in to great fanfare, and then it’s just about maintaining that and bringing the community,” said Krishna Montgomery, founder of London-based Monty PR. “All the different personalities of the [department] stores in the UK … are less homogenised feeling than they are in the States.”

If successful, H Beauty could become the British version of Sephora, with a network of doors throughout the country, and even beyond into continental Europe.

Essex is an ideal testing ground for the concept, too. According to SumUp, a UK based technology firm, Essex is the “vainest” city in the UK based on over one million transactions. Consumers are spending £41, on average per beauty purchase, based on spending in beauticians, barbers, and salons. Edinburgh has the second-highest average beauty spend at £39 , followed by Milton Keynes and London tied at £36.

Nobody is delivering that beauty specialist experience in the UK at the moment with authority.

Harrods will rely on its access to global beauty labels — some of which, including Fueguia's fragrances, are only sold in Europe through Harrods. Exclusive lines and products are incentives to get shoppers into H Beauty to stock up on items they can't get anywhere else in the UK (and in the case of Fueguia, the entire continent). Lines like Chanel and Dior will be merchandised alongside entry-level prestige offerings.

“I was thinking globally but acting locally,” Fard said of the approach to target international brands. “We think this is a big space in the retail market and we want to be able to fill that. I describe it [H Beauty] as premium and authoritative, yet accessible.”

Stores will carry approximately 50 percent colour cosmetics and 35 percent skin-care, with the remainder of product (about 15 percent) falling into the fragrance and lifestyle categories.

“Skin-care is still today a more considered purchase … whereas makeup is a real entry into a new concept, a new brand. It’s easier to try a piece of makeup than it is skin-care,” Fard said. “There is still a significant amount of makeup brands that don’t have a strong representation across the UK.”

An example is Clé De Peau Beauté, which is carried in Nordstrom, Neiman Marcus and Bloomingdale's stores across the US, yet Harrods' Knightsbridge location is the only place to find the brand in all of Europe. Fortunately, the slowdown of makeup plaguing the US has yet to hit the UK, likely a result of a traditional, department store-led model when it comes to beauty.

But in the event it does, Fard’s prepared.

“If that trend came across the pond, then we have the flexibility within the space to be able to speak to that,” she said.

THIS WEEK IN BEAUTY

Tiffany & Co.'s fragrance business could change under new ownership. If LVMH acquires Tiffany and brings beauty in-house, it could impact an already struggling Coty, which has held the retailer's fragrance license since 2016.

CoverGirl has a new ambassador. Riverdale star Lili Reinhart is the face of the beauty brand.

L'Oréal's stocks surged this week. It was the biggest quarterly jump in over 10 years, fuelled by Asian demand.

Estée Lauder beat analysts' forecasts. The beauty conglomerate saw strong international sales in its first fiscal quarter, especially in China.

It may be time to nix longtime drugstore beauty staples. Nivea Crème, an old-school favourite, isn't quite as "dermatologist friendly" as newer, clean options.

Equinox's first hotel opened a 27,000-square-foot spa. The space will offer treatments and services from facial workouts to cryotherapy.

Beauty brands are preparing for Brexit. Labels like Molton Brown and Lush are taking measures in advance of a possible no-deal Brexit.

Polyester wants to showcase perceived "flaws." The London-based zine is glorifying bodies that are marginalised in a new issue, which features "tiger lips, feathered eyes and winged vaginas."

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