LVMH-owned Sephora is cutting its workforce in China, as beauty retailer grapples with slowing local demand in high-end goods, including cosmetics.
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According to the French beauty retailer, the job cuts would impact less than 3 percent of the Chinese workforce, a company spokesperson told Reuters, equivalent to fewer than 120 jobs.
Another report from Bloomberg suggested some 10 percent of the workforce could be affected, citings sources close to the matter.
“In response to the challenging market environment and to ensure our future growth in China, Sephora China is currently streamlining our organisational structure in our head office to ensure we have the right capabilities for long-term sustainable growth,” the company said in a statement to media, without specifying what exact roles would be axed.
Sephora has around 350 stores in more than 100 cities in China, in addition to a Chinese online store.
In April, Sephora appointed Xia Ding to the role of managing director of Greater China, to lead the beauty retail giant’s next phase of growth in the region, one that hasn’t take off revenue-wise like other markets globally.
Ding replaced former Greater China chief executive officer Maggie Chan, who stepped down from her role in January, after five years with the LVMH-owned company.
In the month prior to that announcement, Sephora said it planned to withdraw operations from the South Korea market, after arriving in the north Asian market just five years ago.
Sephora is French parent LVMH’s fastest growing operations, with Paris-based firm saying the beauty retailer clocked “remarkable growth” globally in the fiscal 2023 year. However, it has not performed particularly well in China, a market that is experiencing a slowdown in prestige beauty demand in the last 12 months.
Earlier this month, fellow beauty giant Coty reported a slowing in fourth quarter sales in China, due to high prior-year comparisons and a very gradual market recovery there.