“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.”
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.
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.