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Sephora is opening mini shops in Kohl’s stores

The beauty giant, which is ending its longtime partnership with J.C. Penney, says it is hoping to reach more suburban shoppers.

People walk past a Sephora store in New York in 2018. (Mary Altaffer/AP)

Sephora is ending its longtime partnership with J.C. Penney and heading to Kohl’s.

The beauty giant said Tuesday it will open makeup stands inside 850 Kohl’s department stores starting next year to reach new shoppers in middle America.

Executives said there is very little overlap between their stores. Sephora’s 500 U.S. locations tend to be in busy downtown areas and urban shopping malls. Most of Kohl’s 1,150 locations, meanwhile, are situated in stand-alone suburban shopping centers.

“For us, it’s all about reach,” Jean-André Rougeot, chief executive of Sephora Americas, said in an interview. “We’ve been limited by the size and locations of our store network. The partnership with Kohl’s will allow us to leapfrog many years. We can now deliver the Sephora experience right where consumers live.”

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Each Sephora mini shop will be about 2,500 square feet — roughly the size of a small 7-Eleven — and staffed by Kohl’s employees who are trained by Sephora. The first 200 locations will open in fall 2021, with the rest coming on board by 2023. Kohl’s also will sell Sephora cosmetics on its website beginning next year. Sephora is owned by the luxury conglomerate LVMH Moët Hennessy Louis Vuitton.

Sales of high-end beauty products have slowed during the pandemic, forcing retailers to rethink where and how they sell items such as makeup and fragrances. With many consumers avoiding shopping malls, big-box stores have increasingly become destinations where shoppers can buy essentials, as well as clothing and cosmetics. Target last month announced that it is partnering with Ulta Beauty to open mini shops inside more than 100 of its stores next year.

Less lipstick, more false eyelashes: 5 ways the pandemic is changing fashion and beauty trends

For Kohl’s, the 10-year deal with Sephora represents a way to attract younger customers to its stores, according to chief executive Michelle Gass. In recent years, the Menomonee Falls, Wis.-based retailer has built partnerships with big brands such as Nike, Under Armour and Levi Strauss, which have helped draw shoppers to its department stores. Last year, it began accepting online returns for Amazon at its stores, which executives say has also helped increase foot traffic.

Cosmetics sales are a small but fast-growing part of the company’s business, Gass said: “That’s a signal that our customers — who are 70 percent female — are saying they want beauty at Kohl’s.”

The partnership replaces an earlier tie-up between Sephora and J.C. Penney, which announced it would close nearly 300 of its 850 stores after filing for Chapter 11 bankruptcy in May.

Kohl’s stock surged 15 percent to nearly $37 on Tuesday following the announcement. The company’s shares are down 34 percent so far this year.

Coronavirus: What you need to know

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New covid variant: The XBB.1.5 variant is a highly transmissible descendant of omicron that is now estimated to cause about half of new infections in the country. We answered some frequently asked questions about the bivalent booster shots.

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