Sephora continues to be a standout within LVMH’s portfolio, achieving double-digit growth in revenue and profit as revealed in the luxury house’s full-year 2024 earnings, reported on Tuesday. Its strong performance is a testament to the “lipstick effect,” where consumers turn to smaller luxuries like cosmetics during economic downturns.
This trend has bolstered Sephora’s market share in North America, France, Italy, the Middle East and Latin America. The U.K. has also been a Sephora success story, with five new stores opening in 2024, including a high-profile launch in Birmingham that drew 2,000 shoppers. By 2027, Sephora plans to have 20 stores in the U.K., further solidifying its presence.
Beyond retail expansion, Sephora is doubling down on experiential marketing. Its flagship Sephoria event series has been a major success, with the 2024 Atlanta edition drawing 6,500 in-person attendees. Meanwhile, Sephoria’s Dubai debut attracted 6,000 beauty fans, highlighting the brand’s growing influence in new markets.
Sephora’s Sephoria 2024 events in Shanghai, Atlanta and Paris were a masterclass in localization, adapting the global beauty festival to meet the unique demands of each market. In Shanghai, the “Beauty Funhouse,” with 50 brands and interactive workshops, attracted over 4,000 attendees, while Atlanta’s debut boasted record ticket sales and VIP offerings like early access and themed masterclasses. Meanwhile, Paris brought a luxe European touch with Pat McGrath-led sessions, private consultations and a chic pop-up café.
Unlike brands that have scaled back diversity, equity and inclusion initiatives, Sephora remains firm in its commitment. “Despite economic challenges, we stuck to our commitments, in terms of diversity; our commitments to support our employees, promoting their safety and their well-being, and also … our environmental commitments,” LVMH CEO Bernard Arnault said during the January 28 earnings call. Meanwhile, Target, among other large retail companies, have pulled back on DEI as of this week.
Arnault highlighted Sephora’s strength within LVMH as the Group’s results struggled with the luxury slowdown. “Sephora’s remarkable performance is proof that beauty remains an accessible luxury even in tough economic conditions,” he said. “Since acquiring the company in 1998, its revenue has grown more than tenfold. This remarkable performance underscores its position as the top beauty retailer globally.”
While Sephora thrives, the broader luxury sector is facing headwinds. LVMH reported softer demand in fashion and jewelry, particularly in China and the U.S., though Europe and Japan showed resilience. The Selective Retailing division, however, remains a bright spot, with Sephora driving its strong performance.
