Last week, news broke that Kohl’s and Sephora are accelerating their year-old partnership. After debuting Sephora shop-in-shops in Kohl’s in August 2021, the retailers are not only sticking to their roadmap of adding another 250 shop-in-shops to their offering, but also creating a smaller Sephora footprint in the remaining 300 Kohl’s stores. Kohl’s projected that Sephora at Kohl’s will grow to achieve $2 billion in annual sales by 2025.
Despite broader economic uncertainty and Kohl’s own decreased quarterly sales, Sephora’s growth at Kohl’s signifies that prestige beauty is still very much in demand across retail.
“There is seemingly a universal demand for the quality and diversity of products and the premium shopping experience Sephora offers,” said Jean-André Rougeot, Sephora Americas president and CEO. “[An] interesting takeaway is that the brands that are performing well at Sephora at Kohl’s are quite similar to those performing well at standalone Sephora stores. Brands such as Charlotte Tilbury, Nars and Fenty are doing exceptionally well, which tells us that the Sephora at Kohl’s shopper is quite sophisticated in their beauty purchases.”
Ahead, Rougeot divulges the early successes of the Sephora and Kohl’s partnership, the powerful combination that prestige and convenience delivers, and his outlook for future growth.
The expansion news does not come as a surprise, given the early success of the Kohl’s partnership. But what have you learned about Sephora shoppers?
“The response from shoppers has only reaffirmed what we believed to be true when we first set out on this journey with Kohl’s: Beauty shoppers across the country are hungry for and passionate about prestige beauty at Sephora — the exceptional brands, education and storytelling we offer — and they want all that conveniently. Not only have we been able to reach new shoppers — we’ve welcomed more than 1 million new members to our Beauty Insider community via Sephora at Kohl’s — but we have also seen a dramatic uptick in clients who were [formerly] shopping with us less frequently. Over 750,000 clients are re-engaged in Beauty Insider now that they can weave beauty into their everyday buying. This growth is unprecedented for a well-established loyalty program and speaks to the power of the fit for Kohl’s and Sephora.”
How does this address Sephora’s vision for long-term growth?
“This partnership has played a critical part in enabling Sephora to reach consumers where they are. In the span of 12 months, we have dramatically expanded our reach via 600 new stores in 40 states, effectively making prestige beauty more accessible to more people than ever before and doubling Sephora’s brick-and-mortar presence. And, as mentioned, it’s not just new customers we’re reaching, but also those that had been shopping less due to convenience. We’re thrilled with what we’ve been able to achieve thus far, but it is truly early days. Just 400 stores debuted over the last eight weeks, bringing us to approximately 600 [stores], so these early results are the tip of a very big beauty iceberg.”
Do you think this partnership has had broader implications for the Sephora business and the brands you carry?
“Our business has remained incredibly strong; Sephora achieved excellent performance in the first half of 2022, growing at double digits compared to last year and pre-Covid in 2019, with a strong rebound in our store performance. As we move forward with Kohl’s, our focus is on continuing to find ways to make the Sephora at Kohl’s experience even more integrated and impactful for shoppers, making all the most incredible aspects of shopping at Sephora accessible to Sephora at Kohl’s shoppers, as well. Our loyalty program is growing rapidly, but also, we are helping bolster our brands. They trust us with their growth and, by coming on this journey, they are gaining not only massive amounts of new clients, but also new marketing lanes, new markets to grow and much more. This is a game-changer for our prestige beauty partners in all categories that will prove to make Kohl’s a major beauty player, comparable to the size of some well-established department stores.”