Cosmetics retailer Sephora is making a comeback to Hong Kong after a nine-year absence.
Sephora, which is owned by Paris-based luxury-goods maker LVMH, will sublet 4,000 square feet of fashion retailer Zara’s 15,000 sq ft shop in IFC Mall in Central, according to Chinese media reports.
Zara’s store is on the same floor as other cosmetic retailers including Kiehl’s, Shiseido, Dior Beauty, and Bobbi Brown.
Sephora has signed a lease for HK$2 million (US$254,790) per month for the space.
Sephora, closed its Mong Kok store in 2010, just two years after opening. Market observers noted that although the brand has a loyal following among expats, the initial foray failed because of its wrong choice of location, high rents and poor marketing.
The retailer is known for carrying brands that are not as established as the big names, but have a cult following, such as pop superstar Rihanna’s cosmetic brand Fenty, which has earned rave reviews for its inclusive range of make-up shades.
Sephora and LVMH did not to respond to the Post’s request for comments.
Kevin Lam, executive director and head of retail services at Cushman & Wakefield, said the cosmetics and health care segments have been growing in Hong Kong, bucking the downturn in other segments such as watches, jewellery, fashion and accessories.
“Sephora offers a wide range of European brands to customers at an affordable price level, which is definitely a good option for shoppers in IFC Mall,” Lam said.
According to data from Euromonitor International, beauty and personal care spending in Hong Kong grew by nearly 40 per cent from US$2.8 billion in 2012 to US$3.9 billion in 2018, while make-up spending grew by more than half to US$598 million in the same period.
Euromonitor has also forecast that beauty and personal care expenditure will reach US$4.1 billion, and make-up spending will touch US$652 million this year. In 2022, these will grow to hit US$5 billion and US$831 million, respectively.
But the latest figures on Hong Kong’s retail sales suggest otherwise. Sales slumped 10.1 per cent to HK$40.7 billion (US$5.18 billion) in February from a year earlier, the first such drop in almost three and a half years, as economic uncertainty ate into consumer confidence.
The year-on-year drop in monthly sales resulted in a 1.6 per cent decrease in the first two months of this year, reflecting uncertainty arising from the US-China trade war, the government said on Monday.
This was despite strong growth in tourist arrivals to the city in February, which rose 5.8 per cent to 5.59 million, taking the increase to 16.6 per cent in the first two months of the year.
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According to the latest figures available at Hong Kong-listed cosmetics retailer SaSa International, sales slipped 2.2 per cent in the October-December period compared to the same period the year before, with same store sales in Hong Kong and Macau down 3.7 per cent.
(Source: South China Morning Post)