Sephora has agreed to buy Feelunique as a first step into the UK market, the two companies announced today.
The French beauty retailer, part of the LMVH group, is to buy UK-based Feelunique,for an undisclosed sum from shareholders including Palamon Capital Partners. The deal is subject to competion regulator approval, but is expected to close during the current financial year.
Martin Brok, president and chief executive of Sephora, says: “The transaction is a key step in Sephora’s European growth strategy and marks a first step for Sephora’s presence into the United Kingdom, one of the top 10 biggest Prestige Beauty markets worldwide, with a very high level of digital adoption. UK consumers have a strong appetite for a carefully curated Prestige Beauty offer that is tailored to their needs, and provided through a consumer-centric, seamless experience.”
Sarah Miles, chief executive of Feelunique, adds: “Sephora is an iconic retailer in the Prestige Beauty space in Europe. We are looking forward to working together and leverage our respective strengths to drive the Prestige beauty segment in the UK”.
Beauty retailer and marketplace Feelunique was founded in Jersey by Aaron Chatterley and Richard Scheissl in 2005, and has operated through a strategy of acquiring hair salons in the Channel Islands and French perfumeries in Paris in order to gain access to premium brands, whose products it sells online and in international markets including France, Germany and China. It now sells a range of more than 35,000 beauty products from more than 800 brands to 1.3m customers. It sells online, through three boutiques and two salons/spas in the Channel Islands. Sarah Miles was appointed as chief executive in 2019.
Earlier this year, Feelunique, ranked Top250 in RXUK Top500 research, reported a record-breaking year, thanks to shoppers who moved online to buy beauty products during lockdown. Sales of £103.5m in the year to March 29 were 26% up on the previous year, with sales on its marketplace alone growing by 695% to account for 2% of total sales. Earnings before interest, tax and one-off costs (EBITDA) came in at £2.5m, up from an EBITDA loss of £5m the previous year.
At the time, Feelunique’s Miles said the growth followed a focus on improving the customer proposition “by both expanding our brand relationships and driving continued improvements to the user experience.”
Sephora, founded in France more than 50 years ago, is now owned by LMVH Moët Hennessy Louis Vuitton. It has more than 2,600 shops in more than 30 markets and also sells online, through mobile apps and social media networks. It too had “record” levels of online sales in its latest 2020 full year, but revenues at the LVMH selective retailing division – which includes Sephora and luxury travel retailer DFS – fell by 31% as its thousands of stores were hit hard by lockdowns and it reported a loss from recurring operations of €203m. LMVH’s first-half 2021 figures are due to be reported on Monday.
Sephora’s acquisition of Feelunique looks set to be part of its strategy to boost multichannel sales at a time when store sales have been disrupted and shoppers appear to have developed new online shopping habits in the beauty category.