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Date Submitted: 05/22/2012 11:21 AM

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SEPHORA did remarkably well in 2011, gaining market share

in all regions. The only global specialist retailer in perfume and

cosmetics, Sephora continued to offer shoppers a unique experience

of innovative products and exclusive services and actively

developed its customer loyalty programs in all regions. At the end

of 2011 there were 1,300 Sephora stores in 26 countries.

Sephora further increases its leadership in France and is

expanding its network of stores, while continuing to roll out

an ambitious innovation-based strategy for services. In a mixed

economic environment, Sephora is making progress in other

European countries and strengthened its presence in Russia by

raising its stake in the Ile de Beauté chain to 65%.

Growth in Northern America was once again strong. The new

flagship store in New York, in the heart of the Meatpacking

district, features Sephora’s latest major innovations, such as a

mobile payment system that enables customer service attendants

to process customer payments directly.

Sephora further increased market share in China, where it

accelerated its growth. A new store concept was launched to

accompany the chain’s move upmarket. Sephora also attracted

quite a bit of attention by sponsoring “Beauty Academy”, a popular

TV show where talented young make-up artists are discovered.

The chain pursued its expansion in the Middle East and

Southeast Asia, with two new stores in Kuala Lumpur, Malaysia.

Sephora also opened its first two stores in Mexico. Online sales

continued to grow strongly in France, the United States, Brazil

and China.

Outlook: Sephora will continue its ambitious expansion

in key markets by opening flagship stores. The

chain will expand into new regions, such as

Scandinavia, and will extend its presence in

South America, most notably by opening new

stores in Brazil. Sephora will develop its customer-

oriented strategy and focus on providing

innovative new products and services.