Sephora remains upbeat about Singapore retail sector

Sephora remains upbeat about Singapore retail sector

Despite a challenging operating environment, Sephora is committed to the local retail scene and to South-east Asia as a whole, which it says remains a growth market.

In Singapore, the French cosmetics chain on Friday re-opened its store in ION Orchard's Basement 2, having relocated from the ground floor.

The Singapore flagship outlet is among its top 10 worldwide by revenue.

Mathieu Sidokpohou, Sephora's managing director (South-east Asia), said: "We're committed to growing this region via not only building our store network, but also by investing in building our e-commerce capabilities."

Sephora, which is owned by LVMH, has stores in key central locations such as Orchard Road and Marina Bay, as well as in suburban malls such as Jurong East Mall (JEM), Nex Mall in Serangoon Central and Tampines 1.

Elsewhere in the Asia-Pacific, it has both physical and online stores in Thailand, Malaysia, India, Indonesia, Australia and China. In markets where it doesn't have a physical presence - namely, Hong Kong, the Philippines and New Zealand - it has set up e-commerce stores by leveraging beauty e-commerce start-up Luxola, which has since been rebranded Sephora.

Parent company LVMH acquired Luxola about a year ago.

Mr Sidokpohou, dismissing the notion that online sales might cannabalise store sales, said that having an online and offline presence has proven to be a "big plus"; both offer individual benefits - e-commerce enables Sephora to offer more products, but it is in the physical shops that customers are able to try products first-hand.

Sephora is growing across South-east Asia, said Mr Sidokpohou, but he did not cite figures.

In Singapore, the beauty retailer has opened 11 stores since 2008, when its first outlet opened in Ngee Ann City. There are no plans to shut any of its existing stores; instead, there might even be room for another in one of Singapore's suburbs down the road, he added.

But the local retail industry has taken some lumps, as it grapples with issues such as slower economic growth, competition from overseas markets, a manpower crunch, high operational costs as well as the popularity of e-commerce.

These factors have forced retailers such as the Al-Futtaim group to shut its Marks & Spencer outlet in Centrepoint, its John Little stores in Marina Square and Tiong Bahru Plaza, along with several of its Royal Sporting House outlets. Brands such as New Look and Celio have pulled out of the Singapore market.

The latest data from the Urban Redevelopment Authority shows an island-wide vacancy rate of retail space at 7.8 per cent at the end of the second quarter, up from 7.3 per cent at the end of the previous quarter.

Mr Sidokpohou, still declining to cite figures, said: "Our sales this year continue to be very healthy. We haven't seen yet a negative impact on our sales.

"We believe that if we're able to continue to bring the right excitement, in terms of services and brands, we will be able to continue to delight our customers; as a result, revenue will be generated."

New-to-Singapore brand Kat Von D, a make-up line by US celebrity tattoo artist Katherine von Drachenberg, is among the products available at its flagship store; Sephora at ION will also offer complimentary make-up tutorial sessions.

The relocation within ION arose from the desire to attract more local shoppers - who make up 80 per cent of its customers - and to give the store a facelift, he added. At 10,000 sq ft, the new store is smaller than the 14,500 sq ft outlet on the ground floor.

"We want to be relevant to Singaporeans, to be where the Singaporeans are and where Singaporeans shop.

"When we looked at our customer profile and the products we sell, we felt we would better connect and attract Singaporeans by moving here."

The Basement 2 location is seen as being more in line with Sephora's positioning, with the ground floor of ION housing high-end, luxury brands, he said.

Hundreds of customers stood in line ahead of the store's official opening in Basement 2 on Friday, with some having queued since Thursday evening. At stake were vouchers ranging from S$10 to S$100, which were given out to the first few hundred customers.


This article was first published on July 23, 2016.
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