Thriving Sephora “dreams” of topping €20 billion revenue mark

Beauty retailer Sephora is reopening its Parisian flagship on the Champs-Elysées on Friday, after several months of renovation work. The LVMH-owned chain is dreaming of topping the €20 billion revenue mark, a milestone reached by another of the French luxury group’s flagship brands, Louis Vuitton, as Sephora CEO Guillaume Motte told journalists.

The Sephora group is present in 35 countries and employs 46,000 people (of whom 39,000 in retail jobs). In 2022, according to industry sources, it generated a revenue of €12 billion, making it the second-largest LVMH brand behind Louis Vuitton, which reported a revenue of €20 billion. In 2011, Sephora’s revenue was only €2 billion.

“My dream is to reach €20 billion. Sephora could generate that figure in the regions in which it operates. I’m unable to give a time-frame, but it’s a sound figure and a fine objective,” said Motte during an interview with two media agencies, including AFP.

To achieve this, Sephora intends to “continue to gain market share” in countries where it is already well-established, starting with the USA and China. Sephora is planning to open 100 stores worldwide in 2024.

In the USA, “the world’s largest beauty market” according to Motte, the group currently operates 700 stores, plus another 1,000 run in partnership with cosmetics retailer Kohl’s. “We’re opening 50 stores a year in North America, and I think we can still do so for at least the next five to 10 years,” said Motte.

“Our second priority region is China,” where Sephora currently has “only” 350 stores, almost as many as it does in France. “We have the capacity to open many more stores in China, where we’re only present in 90 cities. Some of our competitors are already established in 150, 190 cities,” noted Motte. According to him, “the fact that China has the same number of stores as France is an inconsistency. [China] is a huge land of opportunity.”

10,000 store visitors per day

China’s economy has slowed down in recent months, and its post-Covid recovery has not been as fast as was hoped. “My job is to build growth on a multi-yearly basis and (…) to support our staff in navigating uncertainty,” said Motte, who was named CEO of Sephora in January 2023.

“We were all a little too optimistic about [China’s] exit from Covid, we had almost forgotten that it took quite some time for Europe and the USA to put Covid behind them,” he added. Today, according to Motte, China is bouncing back “slowly, but it remains a country with amazing potential.” One in which “there is an unimaginable appetite for beauty [products].”

Motte noted that the European market “is very dynamic too,” and cited that “the UK is among the world’s top five markets.” Sephora reopened in the UK only a year ago. “That’s why (…) I don’t really want to [enter] many other [new] countries, I think we still have a huge amount of market share to capture in those where we’re already operating,” he added.

Sephora’s main event in France is the reopening on Friday of the 1,200 square-metre Champs-Elysées store, which has been entirely renovated. It is Sephora’s premier European address and the second in the world (behind Dubai and ahead of New York). The group currently operates 3,000 stores worldwide, including 300 in France.

Before the Champs-Elysées store closed for renovations in May, it had an average daily footfall of 10,000 people, of whom “a quarter” came from outside France, according to Motte.

Sephora, owned by Paris Olympics sponsor LVMH, will be a partner of the Olympic torch relay next summer. The group was keen for its Parisian flagship to be ready in time for the 2024 Games, scheduled in the French capital in July and August, to welcome the many tourists expected on one of the city’s main tourist thoroughfares.

Motte said he’s not actually sure that “footfall will be higher during the Olympics” than at Christmas, though he expects that during the Games it will be approximately “50% above the 10,000-visitors-per-day mark.”