AUGUST 21, 2020

A Publication of WWD

Rougeot's RouteSephora Americas' Jean André Rougeot, in his first in-depth interview since

taking over last year, lays out his strategy for growth, from the future of physical retail to the evolution of brands. For more, see pages 7 to 10.

PLUS: The hot ingredient sweeping the web and Camillo Pane's latest venture. ILLUSTRATION BY LENA KER

ISSUE#23

Beauty Bulletin

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AUGUST 21, 2020

THE BUZZ

¬ Beauty retail is headed the way of dining during the coronavirus pandemic: outdoors.

Brands are focusing on bringing experiential retail outside of the storefront and, in some cases,

to portable formats. Last month, D.S. & Durga unveiled Fumetruck, an ice cream truck-like pop-up, which rotates between locations in New York City, including the Union Square Greenmarket and Williamsburg. Fumetruck is operated by associates from the brand’s brick-and-mortar locations. “When you’re small, you can pivot as much as you need,” said cofounder David Moltz. “If the truck is successful, we can do another in another city.”

On the West Coast, clean beauty brand Beautycounter has also brought its offerings outdoors, starting with a pop-up

wall on Abbot Kinney in Venice, Calif. Opened last month, the wall exclusively features one of its hero products, All Bright C Serum, which was introduced in May. The brand’s concept for the pop-up wall evolved from an interactive billboard into a wall outside of Beautycounter’s store in Venice. The pop-up’s final iteration included a physical beauty counter, with masked associates tending to consumers. “The people walking by are very engaging, and I think the counter concept feels safer than a store environment right now,” said Blair Lawson, chief merchandising and marketing offficer. —James Manso

¬ YouTuber and entrepreneur Mindy McKnight is bringing her beauty background to the toy market.

McKnight, creator of the YouTube channel CuteGirlsHairstyles and mother of twin-fluencers Brooklyn and Bailey McKnight, partnered with Maesa on a hair-care brand, Hairitage, that launched in nearly all Walmart doors in January. McKnight has since teamed with Jakks Pacific Inc. on a toy line of mannequin heads meant for children to play with to learn how to style hair.

The idea came from McKnight's past experiences buying mannequin heads with which to practice new styles for her YouTube channel.

Those mannequins, she said, were often overpriced; she wanted the Cute Girls Hairstyles toy line to be more affordable.

“Early on [after starting her YouTube channel], we could see the potential for toys, specifically mannequin heads,” McKnight told Beauty Inc via phone from her Dallas home. “As I was practicing my skills, I was buying mannequin heads and working on them so that I didn’t have to work on my kids’ hair all day long. My kids would play with them, and then they would learn how to do hair[styling].”

Cute Girls Hairstyles toys will be sold on Amazon and in-stores and online at Walmart, Target and Sam's Club. Prices range from $9.99 for a glitter brush to $19.99 for a jewel hair kit to $39.99 for a styling wig.

Amy Neben, partner at Select Management Group and McKnight's manager, said the partnership with Jakks came about as McKnight “owns a large chunk of the seo [search engine optimization] as it relates to hair tutorials on girls” on YouTube.

Hairitage, McKnight and Maesa's hair-care brand, is on track to do $30 million in retail sales this year despite the coronavirus pandemic, Neben said. The line will expand internationally and debut new categories in 2021.

“Since Mindy does own her audience online, we were not in the position of figuring out how to pivot

to a digital marketing strategy as stores were closing,” Neben said. “The in-store element obviously was impacted by COVID-19, but we still maintained strong sales on e-comm.”

Asked how the pandemic has impacted her YouTube channel, McKnight said engagement is up, but overall ad spend is down. Influencers, she added, have also taken “a lot of heat” — an occurrence that seems to be the result of superinfluencers' general struggle for relevancy and social media users' increased time on platforms.“TV production shut down, movie production shut down, so the only thing that people had to watch was whatever was on the Internet,” McKnight said. ”I do feel like, because of that, [social media] was the most hate-driven, negative this year. People were so angry and taking that out on anybody they were around. My family and our channels managed to get through that. We tried to continue to bring the positivity back to the space and talk about uplifting things and family.” —Alexa Tietjen

YouTuber Mindy McKnight Launches Toy Line

Beautycounter, D.S. & Durga Get Creative With Pop-ups

PRESTIGE BEAUTY has been impacted in the top markets by the coronavirus, and even skin care, the most resilient category, has faced double-digit declines worldwide in the first half of the year, according to new data from The NPD Group. “Overall, skin care and hair care have been the most resilient among the beauty categories during the COVID-19 period as consumers have prioritized these routines,” said Larissa Jensen, beauty industry adviser at The NPD Group. Skin care is showing strength worldwide:  France saw a one percent difference in prestige skin care and beauty overall. Also topping the list is Germany, which faced the smallest decline in beauty overall out of all eight countries. Mexico's business suffered the most. Here, how the U.S., Canada, Germany, France, Mexico, Italy, the U.K. and Spain ranked by second-half beauty and skin-care sales.

PRESTIGE BEAUTY SALES BY COUNTRY:

germany: -21 percent canada: -22 percent

u.s.: -25 percent france: -30 percent

spain: -31 percent u.k.: -35 percent

italy: -36 percent mexico: -47 percent

PRESTIGE SKIN-CARE SALES BY COUNTRY:

canada: -12 percent

u.s.: -14 percent germany: -17 percent

u.k.: -27 percent spain: -29 percent

france: -31 percent italy: -32 percent

mexico: -38 percent

Source: The NPD Group

U.S., Canada, Mexico: Jan. 5 to July 4U.K.: Dec. 29 to June 27

Italy, Spain, France, Germany: Dec. 30 to June 28

By the Numbers: Comparing Prestige Beauty Sales Worldwide International data from The NPD Group shows the global impact of COVID-19 on sales. BY JAMES MANSO

A CuteGirlsHairstyles styling head, $29.99.

Mindy McKnight

Beautycounter has taken its offerings to the wall outside of its store in Venice, Calif.

https://bit.ly/2YgiIIw

4

AUGUST 21, 2020

NEWS FEED

THERE’S ANOTHER NEW

beauty incubator on the block.

Camillo Pane, former chief

executive officer of Coty Inc., is ready

to introduce Present Life, his new

brand-building (and sometimes

acquiring) venture.

Backed by The Craftory, a London-

based venture capital firm, Present

Life is launching with a portfolio of

three beauty-meets-wellness brands.

Two of them were incubated in-

house. They are Healist Advanced

Naturals, which makes CBD topical

and ingestible products, and

Loum, a skin-care brand with a

psychodermatology ethos. One was

acquired — One Ocean Beauty, a

skin-care line that counts marine

collagen as its star ingredient and

donates a portion of its product sales

to saving the oceans.

One Ocean Beauty was founded

in 2018 by Marcella Cacci, a former

head of Burberry beauty. Its skin and

anti-cellulite body-care products are

priced from $38 to $114 and are sold

on Net-a-porter and the online retail

platform Olivela.

Pane, who resigned from Coty

in 2018, is used to overseeing big

household names like Cover Girl

and Gucci, but those days for him

are over — he believes the future

of beauty is in clean, sustainable,

purpose-driven brands.

“I got together with The Craftory,

and we saw an opportunity to create

and acquire benefit-led brands that

don’t compromise on performance

or [harm the] planet. It’s no-

compromise, natural self-care that

works,” Pane said. “All our formulas

are vegan and cruelty-free certified

and follow the highest standards of

clean beauty, like Credo and Follain.”

Pane and The Craftory cofounder

Elio Leoni Sceti are both veterans

of Reckitt-Benckiser, the British-

Dutch consumer goods company. The

Craftory invests in wellness-oriented

CPG brands, including a plant-based

alternative food manufacturer and

a sustainable laundry detergent

pod brand. The Craftory’s other

cofounder is Ernesto Schmitt, who

founded Beamly, a digital marketing

platform that Coty acquired in 2015.

“I’ve known the founders for years,

and over the past several months,

we’ve been talking about how to best

approach wellness and beauty,” Pane

said. “Wellness is such a growing area

and there’s a massive passion around

it. People need support in their lives

— it’s self-care. It’s only going to get

bigger and more important.”

Present Life has offices in New

York and London, though employees

are working remotely due to the

coronavirus pandemic. Pane serves

as the company’s executive chairman,

and his brands operate as separate

teams while sharing resources. He

has staffed Loum and Healist with

a combination of people from the

start-up world and his past life in

consumer goods, including Healist’s

chief global marketing officer and

former Coty executive Michael Bryce.

“It’s important to create a team

where you have a mix of backgrounds

— the objective is not always to

surround yourself with people who

think like you,” Pane said.

For now, Pane is concentrating

on Present Life’s current portfolio,

and would not reveal details on any

future plans. “We want to focus on

these three for the time-being. Do we

want to build other brands? Yes, but

it depends on the opportunity. We’re

not going to deviate from the benefits

we think are relevant. They aren’t

going away.”

Skin-care brand Loum is set to

launch on Sept. 1, direct-to-consumer

on loumbeautycom. The line, which

was formulated with the help of

psychodermatologist Dr. Francisco

Tausk, is centered around the impact

of stress on skin. The brand touts its

Tri-Serene Complex, a combination

of CBD, marine-micro algae and wild

indigo extract, in combination with

other natural ingredients like borage

and hyaluronic acid, to help calm and

reverse visible signs of stress. Daphne

Oz, co-host of ABC’s “The Chew,”

Instagram lifestyle influencer and

daughter of television’s Dr. Mehmet

Oz, has been tapped to promote

the business. The plan is for Loum

to remain “70 percent d-t-c” and

eventually find additional distribution

through specialty beauty, Pane noted. 

“Skin care is only going to continue

to grow post-COVID-19,” Pane said.

“I see it as a moment of nurturing.

It will become even bigger because

of what is going on. I don't think

there's a brand that solely focuses

on how stress affects the skin.”

Healist, which sells CBD topicals

and ingestible products launched

direct-to-consumer in the U.S. in

April. It is planning a brick-and-

mortar expansion as well as a move

into Europe sometime in 2021. 

The Healist brand is centered on

transparency, said Pane, citing the

confusing nature of the CBD market.

“We want to bring transparency and

openness to the CBD market,” he

noted. The brand is formulated with

organic broad spectrum hemp and

minor cannabinoids, including CBDA,

CBG, CBN and CBC. The products are

designed to impart specific benefits,

such as sleep improvement, pain relief

and stress support. “The benefits are

current and timely,” Pane said. “Lots

of sales are happening in the middle

of the night, between 1 a.m. and 6

a.m., when people are looking for

solutions when they can't sleep.

Content and education are a

key part of Pane's strategy, from

building out comprehensive brand

web sites with plenty of educational

materials to choosing the right

influencers to promote the products.

But ultimately, it all comes back to

product efficacy, he said.

“I‘ve managed a lot of big brands,

I have a massive passion for brands,”

Pane said. “The story has to be told

in a differentiated, distinct way…

but you have to start with amazing

products at the core.”

Camillo Pane Unveils Brand Incubator Present Life The former Coty ceo is using his “massive passion for brands” to steer his new business. BY ELLEN THOMAS Products from Healist Advanced Naturals.

“Wellness is such a growing area and there’s a massive passion around it.

People need support in their lives — it’s self-care. It’s only going to get bigger

and more important.” —camillo pane

Sustainability and the Human ElementS E P T E M B E R 1 5 • V I R T U A L C O N F E R E N C E

C U L U R E C O N F E R E N C E

ATTENDEE INQUIRIES LAUREN PYO LPYO@WWD.COM | EVENT SPONSORSHIP KATE WALKER KWALKER@WWD.COM

For more information visit fairchildlive.com

LE AR N M O R E

Exchange ideas with industry executives, change agents

and thought leaders committed to a more sustainable and

equitable future for fashion, beauty and retail.

CHANGING CONSUMER BEHAVIOR

ANNUAL PARTNERS

EVENT SPONSORS

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The Royal Botanic Gardens, Kew

FL_HAD_SUSTAINABILITY_02.indd 2 8/13/20 5:26 PM

6

AUGUST 21, 2020

NEWS FEED

LONDON — Sweaty, acne-prone

adolescent boys are largely ignored

by the beauty, grooming and wellness

industries. It’s the teenage girl who

normally gets all the attention from

brands and marketers, while any boy

in need of a hair, skin or grooming

fix is left to root around for products

geared toward grown men, or women.

This is just what Stephanie

Capuano, a California native who

lives in London, discovered when her

14-year-old son was packing up for

boarding school a few years ago.

“About two weeks before he left, I

think stress — and puberty — hit. His

skin started breaking out with those

pesky little spots across his nose, and

then he started to smell — there was

this crazy body odor that came on. And

there I was, a mother always wanting

to make smarter choices — about food,

laundry care and bathroom cleaning

products. But the products I found for

young men, and teenagers, were not

up to scratch,” Capuano said.

She recalls making trips to Boots and

reading the labels of popular products.

She found aerosol deodorants that

were bad for the planet, and skin care

laden with harsh chemicals.

She ended up at Space NK, and

bought an expensive tub of clearing

pads for her son's spots — cutting

them in half to maximize the supply

— and said the whole experience got

her thinking.

Hunting in pharmacies and beauty

counters, Capuano did find some

suitable, all-natural products, but

they smelled strange, and often the

packaging was frumpy — or at least not

appealing to urbane kids who are into

streetwear and shopping on Depop.

“I wanted something stylish and

aspirational, something that they

would actually use,” she said.

In a bid to satisfy those

requirements Capuano, who’d had a

career in pharmaceutical and biotec

public relations before moving to

London, created 31st State.

She named the brand after her native

California, the 31st state to join the

Union in 1850, and tailored the products

around adolescents and young adults.

She tried to make them smell good, and

look good on the bathroom shelf with

gender-neutral branding, sun-bleached

colors and a typeface that looks like it's

been handwritten.

The range, which is vegan, was

created with a product development

consultant who'd worked in the past

for The Body Shop.

Together, they came up with a tight

edit of seven products, including

overnight clearing pads, a 2-in-1 hair

and body wash, deodorant and a

spot-control gel.

“It took a long time to get it right:

Most of us want to feel like our skin

care is actually doing something, and

I learned that a lot of products have

ingredients that are unnecessary. You

can really strip down the number of

ingredients, choose them wisely, and

you still have the same effect.” she said.

Capuano and the consultant,

Claire Bristow of Genius Beauty,

made an effort to appeal specifically

to Gen Z, and considered ingredients

that would resonate with them.

To wit, the products contain copper,

zinc, magnesium and silver.

The business is primarily direct-to-

consumer, but it also sells on Asos.

com and Free People in the U.S.,

and through Liberty, Next, Ocado,

Flannels and Victoria Health in the

U.K. All products are made in the U.K.

and the packaging is fully recyclable.

Prices range from 5.99 pounds

for the roll-on deodorant to 15.99

pounds for the clearing pads.

Capuano said direct-to-consumer

sales have been doubling, and even

tripling, in some cases compared

with this time last year.

She said that during the pandemic

the foaming face wash, 12.99

pounds, has been flying

off shelves, while there

are plans to bring a solid

deodorant to the market by

Christmas. The brand is also

working on a face scrub and a mist for

back acne.

Girls can use them, too: Capuano

said her husband refers to the

clearing pads as the “boyfriend jeans”

of the product line because they’re so

popular for a variety of skin types.

“I leave it on the kitchen counter.

Everybody uses them,” said Capuano,

who is in her 40s, and who has two

sons and a daughter.

“I started it for boys, but we’re

thrilled that girls use it, too. Everything

about this generation is fluid — it’s like

no other generation before. They will

embrace anything that sits within the

lifestyle they adhere to.”

In the spring, 31st State attempted

to bring its community of mostly

16- to 24-year-olds closer together,

building on the brand's existing blog

with a project called Gen Z, The

Corona Diaries.

Capuano wanted the community

to write personal essays and submit

photos, talk about their feelings

during lockdown. She wanted them to

open up about not being able to go to

school, university or summer festivals,

about not being able to see friends and

spending more time on social media.

She ran the submissions, unedited,

on the site. I can’t tell you what’s in

the mind of an 18-year-old, and from

the start we felt like we needed to be

asking them and listening to them.”

Looking ahead, Capuano is

looking at pushing further into the

wellness category, possibly launching

nutritional gummies or even sexual

wellness products.

“There’s room to talk to this

generation about sexual wellness in

a different way,” she said.

Capuano believes that Gen Z is

fascinating on a number of levels.

“They have no stigma around talking

about mental health. They are open

about seeing therapists, or taking

antidepressants or supplements, and

they are very, very open about their

sexual wellness, too,” she said.

Having gained traction in the U.K.,

31st State is starting to build on its

presence in the U.S. market. It also

wants to expand in Europe and Asia.

Capuano said that, outside the

U.S., the brand's California vibe

“has become a state of mind. This

aspirational idea of California

resonates everywhere around the

world. It’s about doing things that

are a little more natural and

progressive.”

31st State Speaks To Oft-Ignored Demographic Stephanie Capuano struggled to find natural skin-care products for her adolescent boys, so she created 31st State, a brand tailored to Gen Z. BY SAMANTHA CONTI

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Stephanie Capuano with her sons, whose skin-care needs inspired 31st State.

The 31st State starter set.

7

AUGUST 21, 2020

DEEP DIVE

IT’S 9 P.M. ON A MONDAY, and

Jean-André Rougeot’s printer is not

working. 

Rougeot, the chief executive officer

of Sephora Americas, has been

working remotely from rural Maine

for a month, where he and his wife

own a cottage near Acadia National

Park. It’s on “the side of the park

that nobody knows about” he said

— beautiful and quiet — good for

working from home, sort of. (His iPad

has been a little finicky, too, he noted.) 

“It’s a blessing because it’s a

beautiful place and my wife is happy

to see me. It’s a curse because it’s not

the same as working from an office.

You just don’t have access to the

technology,” Rougeot said in a phone

interview with WWD Beauty Inc. 

His first wide-ranging interview

since he took the helm of Sephora

in January 2019 comes at a pivotal

time for the business, which, like

all retailers, has been hit hard by

the coronavirus pandemic and

faced with what to do in response

to the resurgence of the civil rights

movement in June. 

Rougeot and much of his team

seem to be working around the

clock in order to propel the business

through the pandemic, but also

to secure Sephora’s place in the

specialty retailing environment of the

future. Once dominant, Sephora has

faced fierce competition in the U.S. in

recent years as Ulta Beauty emerged

as an added distribution option

for brands that were once Sephora

loyalists and became the retailer of

choice for many Gen Z favorites, like

Kylie Cosmetics and Morphe.

Technically, in the U.S., Ulta is the

bigger “brick and mortar” player, with

26.7 percent market share, according

to Euromonitor. Sephora, which only

sells prestige beauty, ranks third on

the list, with 14.9 percent market

share, after Bath & Body Works. But

in the prestige beauty world, Sephora

remains the largest player, having

edged out Macy's.

Having spent much of his career on

the brand side, Rougeot is the rare

retail executive who understands

both sides of the business. A key part

of his strategy to acquire and retain

customers is product differentiation,

a key tenet in his previous roles.�

Sephora’s Jean-André Rougeot Reveals His Strategic Vision The ceo’s next goal is to bring diversity through the business landscape. BY ALLISON COLLINS

Jean-André Rougeot with Sephora cast members in a recently reopened store.

8

AUGUST 21, 2020

DEEP DIVE

“We have to drive traffic to both

our stores and to our web site, and

then when we’ve got the traffic, we

need to engage them in a way that

they’re going to come back to us and

we become their beauty retailer of

choice,” Rougeot said. 

When he talks about

differentiation, he means brands

with solid DNA — among those

he called out were Fenty Beauty,

Tatcha, Drunk Elephant, Olaplex and

Pat McGrath. “The ability to bring

those very unique brands to our

consumers is obviously a huge driver

both of traffic, but also of repeat

business,” Rougeot said. “Sephora

has incredible skill at finding young,

up-and-coming brands, nurturing the

founders, helping them along. And

we see already the next generation,”

he continued, citing skin-care brand

Youth to the People and body-care

player Sol de Janeiro as two that are

particularly resonant now.

Rougeot — who is intimately

familiar with Ulta from his time

leading Benefit, where he was ceo for

12 years — is determined to continue

Sephora's dominance in discovering

the next generation of relevant

brands, and repeatedly underscored

the Sephora merchandising team’s

unparalleled brand finding and

building abilities. Recent examples,

he said, include Sephora’s launch

of Patrick Starrr’s OneSize, and the

upcoming launch of Selena Gomez’

Rare Beauty, as successes.

“There were times where brands

like these would probably have gone

to Ulta,” he said. “You saw it with

Kylie.” But brands now have looked at

Sephora’s offerings in the marketplace

— which include business and brand

guidance as well as a global store

footprint — and are choosing to

launch with them, Rougeot said.

“Many brands are thinking, ‘Wait a

second. If I stay with Sephora and I

ride with them on the international

wave, I can build a very sizable

business. We’ve seen that with brands

like Tatcha and Drunk Elephant.” 

Sephora, which has been in the U.S.

for about 20 years, was built on that

differentiation, mostly in makeup,

and on driving trends like contouring,

Rougeot said. But things have

changed, and not just because the

contouring craze ended. Many brands

that were once Sephora-exclusive have

sought growth in Ulta. Lately, that

even extends to brands from fellow

LVMH-owned business Kendo — KVD,

the makeup line formerly affiliated

with Kat Von D, just launched there

this month, for example.

Rougeot classified the Kendo-

Sephora relationship as “incredibly

strong,” but said that now, most

of the brands Sephora carries are

independent, and that the retailer will

continue to pursue new relationships

with brands and develop its own

Sephora Collection products.

Gradually, the Sephora strategy has

evolved, as borne out by the Times

Square flagship that opened in 2019.

Makeup is still there, occupying about

half of the selling space, but at least in

this interview, it’s the least discussed

part of the business. Broadly, makeup

sales have plummeted during the

pandemic — NPD data shows a 52

percent decline in the second quarter,

to $869 million in the U.S.  

But skin care has been a bright

spot, outpacing makeup sales during

the COVID-19 pandemic, according

to Rougeot. “Our skin-care business

grew versus a year ago during the

COVID-19 crisis,” he said.

Sephora, he said, is being

“rewarded beautifully” for being early

to, or in some cases making, trends. 

“For many years, Sephora has really

pushed the boundaries, pushed the

envelope on creating and delivering

beauty in a different way,” Rougeot

said, using Sephora’s push into clean

skin care as a prime example. 

“Four or five years ago, Sephora

embarked on a journey about clean

skin care, which to be honest, was

very controversial,” he said. Skin care

then was primarily from the “two

quality brands” Clinique and Estée

Lauder, Rougeot said, but Sephora

was ready to go after the 35-and-

under set with a new strategy. 

“We started to see the consumer

being less excited about palettes and

sets in makeup and we started to see

young people ask questions about

skin care. This is a big jump because

skin care used to be a slightly older

customer,” he said. 

But new skin consumers wanted

clean, and they wanted cute.

“What they are interested in

is clean skin care, skin care with

packaging that is environmentally

friendly, skin care that is easy to

understand — they’re not into big

regimes where you have to buy seven

products and spend $1,000. They like

simplicity and they also like skin care

with a touch of whimsy — that’s why

[brands like] Drunk Elephant and

Youth to the People are so successful,”

Rougeout said. 

Eventually, clean became a big

enough part of the strategy to

warrant its own seal. The retailer

launched the Clean program in mid-

2018 in order to identify products

that aren’t formulated with parabens,

formaldehyde, mineral oils and other

ingredients that worry consumers.

“What Sephora did with Clean

is established simple benchmarks,

simple guidelines that allowed the

consumer to feel comfortable and

reassured that the products that

have the Sephora clean seal were

generally good products for them and

their skin,” Rougeot said. “Everybody

and their brother now is trying to

copy [it] — Ulta’s doing something,

Nordstrom’s doing something.” 

The product differentiation point�

“Consumers are not into big regimes where you have to

buy seven products and spend $1,000. They like simplicity and they also like skin care with a

touch of whimsy.” —jean-andré rougeot

Differentiated brands are

outperforming at Sephora.

9

AUGUST 21, 2020

DEEP DIVE

becomes even more important when

other retailers look to copy Sephora,

Rougeot said. But so do Sephora's

relationships with brands, he

emphasized, pointing to a variety

of incubation and COVID-19

partnership efforts the retailer has

undertaken in order to be a good

steward to its brands (like paying

on time). 

“One of the things Artemis [Patrick],

who is our global merchant, and I

discussed very early on in the crisis is

that we would stand by our brands,”

Rougeot said, noting that brand

partners were paid within 30 days.

“I can’t tell you how many brand

founders have called me literally

crying on the phone saying, ‘I cannot

believe that I got a check from you.’

They never thought we’d pay them

on time.” Part of that, Rougeot notes,

is because other retailers sometimes

delayed payments for 90 days or more,

which for young brands, can prove

financially devastating. 

“In times of crisis where every

other retailer basically behaved

pretty selfishly — I’m not being

critical, I’m just being factual —

Sephora said, ‘No way. We will

stand by you,’” Rougeot said. 

He may only be indirectly critical

of his competition, but he did not

hesitate to point out the many ways

in which he believes Sephora is better

equipped than others to withstand

“tough” brick-and-mortar retail sales

during the pandemic, identify and

incubate brands of the future and set

an example for the retail community in

terms of diversity and inclusion efforts. 

Sephora, which has 439 U.S. stores,

has navigated the current brick-

and-mortar climate — where stores

were ordered shut for two months

and then reopened to minimal and

wary customer bases — through

massive upticks in its already sizable

e-commerce business. Some days, sales

volumes surpassed Black Friday 2019,

and in the past few months, Sephora

has gained more than 1 million new

customers, the company said.

Before the pandemic, e-commerce

made up almost 40 percent of Sephora’s

sales, Rougeot said. Since the pandemic

hit, online sales are up between 70

and 80 percent, he said, making up for

some, but not all, of the volumes lost to

an unstable retail environment.

Sephora has been investing

“tens of millions” of dollars a year

in e-commerce, Rougeout noted,

and already had the supply chain,

warehousing and call centers in place

in order to withstand and fulfill the

massive uptick in online orders that

it saw during the pandemic. 

“Companies like Ulta and Macy’s

were just not ready for those volumes

to explode on their e-commerce. It

was tight…the pressure of the chain

of supplies was significant, but it

didn’t break, and as a result we were

able to ship and satisfy the demand,

and our brands got lucky — they were

getting a lot of orders,” Rougeot said.

Skin care, hair care and fragrance

have all seen sales upticks during the

pandemic, he noted. Sales in the rest

of the Americas — Canada, Mexico

and Brazil — rose, too. “Our shares

in Canada, Brazil and Mexico have

gone through the roof…because

the competition is really weak

from an e-commerce point of view,”

Rougeot said. 

Physical retail has not fared so

well, he acknowledged. “We have a

28-page-long book about how to run

a store under COVID-19,” Rougeout

said. “That said, business is tough.

Consumers don’t have the confidence

to go into stores.” 

He said the impact is likely to be

toughest on “traditional malls” and

that he expects storefronts to empty

out as more retailers go bankrupt.

“Suburban malls, convenience malls

— that’s where the customer is going

to buy,” he said. 

Such locales are not where Sephora

has its core real estate footprint,

which remains significantly tied to

malls. Pre-pandemic, the retailer had

planned to open 100 new non-mall

stores this year. That number has

since been more than halved, with

closer to 40 expected to open this year,

Rougeot said, and more likely to come

in 2021 and the following few years. 

“We don’t have a fixed number yet

because it depends on negotiation

with landlords, and the way that’s

changed. We want to look at a slightly

different understanding of how we

work with landlords,” he said.

Still, it's full steam ahead on

implementing a new store design,

with high ceilings, good lighting and

smaller physical footprints hallmarks

of the new era.

“I went to one in Colorado a few

weeks ago and I had goosebumps on

my back. This is just a good-looking

store. It’s exactly the kind of store our

customer wants to walk in,” he said. 

The layout in those stores is also

different, he pointed out. Prestige hair

care, a nascent category until about

three years ago, is at the front, to the

right, he said. “We started doing in

hair care what we did in skin care five

or six years ago,” Rougeout said. That

included going out and finding brands

like Briogeo and Olaplex “that really

are pushing hair care very differently,”

he said. Olaplex, in particular, is a

brand that is “just better.”

“That has not happened in hair

care for 30 years,” he said, noting

that the category had long been

dominated by P&G and Henkel, with

contributions from L’Oréal. 

Fragrance, too, has found itself

in a somewhat surprising growth

moment at the retailer, where it is up

double digits over the last six months.

“We didn’t have big market share,

it wasn’t something we spent much

time on,” Rougeot acknowledged.

Growth is coming from brands such

as Chanel, Dior, YSL and Jo Malone,

which Rougeot attributed to a shift

in channel patterns. “I think it comes

from the demise of the department

stores. Department stores are�

“It’s going to be a long road and we won’t get to

15 percent tomorrow, we won’t

get to a balanced leadership mix

tomorrow, but the point I heard from all our

employees is we have to start

today.” —jean-andré rougeot

Rougeot brings a renewed focus to the in-store experience.

10

AUGUST 21, 2020

DEEP DIVE

struggling mightily,” he said. 

Sephora has had a mutually

beneficial relationship with one of

those mightily struggling department

stores — J.C. Penney — for 15 years. 

Of those, about 13 years resulted

in a “goldmine” for both retailers,

Rougeot said. “They were able to get

a beauty offering they couldn’t get on

their own, and we were getting access

to a customer that normally would

not shop in our stores,” he said.

But as J.C. Penney’s troubles

deepened, Sephora has rethought

its relationship with the department

chain. Earlier this year, the two got

into a legal dispute over opening

Sephora inside J.C. Penney's stores

during the pandemic.

Today, Sephora has almost 615

Sephoras inside JCP locations, and

many are “actually doing relatively

well in the COVID-19 environment,”

Rougeot said. For now, he said,

Sephora will wait out the J.C. Penney

bankruptcy and see what happens.

“If they remain a department store

with a decent size of portfolio of

stores, and they do the right thing

with their stores, that relationship

will continue, probably on a slightly

smaller level,” He said. “But at some

point, that relationship will be over.

But this is not for now, this is for

the future….If they come out [of

bankruptcy] with a strategy that is

supported and financed properly, we’ll

surely continue our partnership.” 

Sephora has quietly done some

restructuring of its own, laying off

7 percent of the corporate workforce,

117 jobs, including some jobs related

to J.C. Penney operations. Sephora

positioned the move as part of

an ongoing review of corporate

structure, and added 132 different

full-time roles meant to reduce

reliance on contractors and center the

business “on the new environment

that all retailers face,” the company

said in a statement. 

When Rougeot joined Sephora,

simplification was one of his key

goals. The business was successful,

with talented and passionate

employees, but too often distracted

by what he called “shiny toys.” 

“When I took over, we needed

to cull the strength of Sephora,

the quality of the team, and focus

on a small but mighty amount of

initiatives,” he said. He made a

shortlist of about eight different

initiatives, including prioritizing

e-commerce and improving the user

experience. “That has been a big plus.

I obviously could not predict the

COVID-19 crisis, but it has made us

tougher as we’re going through the

crisis,” Rougeot said.

He’s also refocused the company

on its DNA, he said, “not just as a

marketing tool, but as a fundamental

way to do business.” 

“I have spent my life building

companies and building brands

and the key to success has always

been DNA. Define your DNA, and

then [drive] it relentlessly. Sephora

always had great DNA, which

is fundamentally a place where

everybody belongs…what did not

really happen, is that we did not

express it really clearly,” Rougeot said. 

Sephora has not always been a place

where all customers felt welcome, as

evidenced by accounts of racial profiling

from Black shoppers, including R&B

singer SZA, who tweeted in 2019 that

a staff member had called security on

her while she was shopping. Sephora

later closed all operations for a day for

unconscious bias training. 

“We know there is unconscious bias

in stores. That is true for all retailers.

It’s not as bad frankly at Sephora

because of the amazing rainbow of

people we have in our stores, but it’s

still true. We have an unconscious

bias problem in our stores,” Rougeot

acknowledged. He said it is being

addressed through training and

efforts to diversify store leadership. 

Diversity efforts will extend beyond

that though, he said, through all

levels of the company. Only 6 percent

of leaders across stores, distribution

and corporate leadership are Black,

Sephora said in a response to Sharon

Chuter's Pull Up for Change campaign. 

Sephora has started doing webinars

and listening sessions with employees

of color, who are encouraged to talk

about race relationships, racism

and their lives inside and outside of

work. Rougeot listens, sometimes

anonymously, he said. “People

cry. They tell their life stories. It’s

incredibly powerful,” he said. 

Those stories have become part of

his motivation for Sephora’s next act,

which is to work to infuse diversity

through the retail ecosystem,

Rougeot said. 

“Like we did with brand

relationships, or with Clean, we can

do the same in D&I for retail,” he said.

“That’s the thing that gets me out of

bed in the morning. That we can make

a difference and we are 100 percent

committed to make it happen.”

As a sign of that commitment, in

June, Sephora became the first retailer

to sign Aurora James’ 15 Percent

Pledge, which calls for retailers to

dedicate 15 percent of their shelf

space to Black-owned brands, roughly

in line with the Black population

in the U.S. Sephora plans to bring

between 20 and 25 BIPOC founders

into the Sephora Accelerate program

in 2021, which helps young beauty

brands learn the business ropes, and

said it will help connect those brands

to the investment community. 

“It’s going to be a long road and we

won’t get to 15 percent tomorrow, we

won’t get to a balanced leadership

mix tomorrow, but the point I heard

from all our employees is we have to

start today,” Rougeot said. 

The initiative is one that Rougeot

sees lining up with Sephora’s broader

goal to engage its best customers —

some of whom shop 15 to 20 times a

year — even more. “Consumers today,

especially younger generations, will

make shopping decisions based on

values,” Rougeot said. “The number-

one value that’s going to impact their

decision is going to be D&I. They’re

going to be looking very carefully.” 

In terms of engaging employees,

Rougeot has become entirely reliant

on Zoom. It's a new system for a man

who describes himself as “old school”

and as someone who “thought that

being in the office was critical to

success.” 

He’s been proven wrong, though, and

said the past six months have resulted

in some of the more productive

times Sephora has seen, he said. The

business relaunched its Beauty Insider

rewards program, launched Instagram

shop and is preparing to roll out a

reserve-online-buy in-store option later

this month, on top of brand and digital

efforts, but after six months, he's

starting to worry about the company

culture. “I’m worried about the ability

to grab somebody in the corridor and

say, ‘Let’s spend 10 minutes on this.’ I’m

worried about the informal exchanges,

the jokes.” 

But, on the plus side, people are

actually getting to meetings on time.

“We have never started so many

meetings on time since I have been at

Sephora. If we have a 9 o’clock Zoom,

everybody’s on at 9 o’clock,” he said. 

And, for Rougeot, there's also a

water view. “I’m watching the ocean

right now, so I’m not complaining too

much,” Rougeot said. “Except when

my printer breaks down.” ■

Rougeot with a cast member in a Sephora mask.

Clean is a big focus for the retailer.

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products and the second, raised a bit

higher, earmarked for workshops and

other semi-private events.

Walk in and there’s a workbench

inspired by the wooden Varberg bath

houses and nodding to the métier

of Kylén — a ceramist — with the

irregular clay sink she crafted.

The natural, organic brand culls

traditional elements from Sweden,

then gives them a modern twist.

“Part of the brand is to have

familiar yet unexpected solutions,”

explained Le Bert.

Instead of using fresh algae, for

instance, the Spa Bath Seaweed

product contains dry algae for

detoxifying and revitalizing skin.

“We worked with the third

generation of seaweed harvesters

near Varberg,” said Le Bert.

There’s a refillable candle with wax

to be poured and a wick to be placed

at home, and soap on a rope with not

one being the same length.

At the sink, people can try a three-

or five-product hand treatment.

The 160 non-gender-specific

stockkeeping units are divided into

face care, body care (the largest

category), hair care (a rising segment,

launched in April) and home products.

The company is spotlighting face care.

“I keep calling this ‘the silent-hero’

category,” said Le Bert. “It’s when you

know everything is there, but you just

need to shout it louder to make sure

it connects with customers.”

Part of that strategy involves

the Marais shop offering same-day

delivery of free sample kits of product

tailored to specific beauty needs.

Upcoming for L:A Bruket is a

single-sheet mask imbued with 24

ml. of serum, which will be sold

starting in September. Meanwhile,

the Broccoli Seed Serum is flying off

shelves, according to Le Bert.

The store’s debut came a few weeks

after a freestanding L:A Bruket

boutique opening in Berlin and

following the debut of a location

on Rue Saint-Sulpice, on Paris’ Left

Bank, that began as a pop-up in late

November.

HORACE, 68 RUE VIEILLE DU TEMPLEThis Rue Vieille du Temple boutique

is the first permanent brick-and-

mortar location for Horace, which

was cofounded in 2015 by Kim

Mazzilli and Marc Briant-Terlet.

The 275-square-foot store, opened

on June 3, is located close to the

pop-up Horace operated, also in the

Marais, in the beginning of this year.

“One of our ambitions is to make

skin care for men accessible,” said

Mazzilli. “It is in the brand values,

and there are still people who need to

have physical access to products.”

The light-infused store has white

and rough-stone walls and floor. The

streamlined merchandising units are

of wood with white drawers.

Here, there’s the full array of

Horace products, including for the

shower, body, face, beard, shaving

and hair. A central area is allocated to

bestsellers or ephemeral offers.

Mazzilli said the goal isn’t to have

hundreds of stores, but to open them

when it makes sense in Horace’s

quest for accessibility.

“It’s one of the channels of

proximity,” he explained, adding more

locations could be possible in France

and also abroad. “The boutique is a

good means of discovery.”

For Horace, apart from the first two

weeks of confinement in France, its

online sales have been up on-year.

Mazzilli noted a change in what

sold best. Rather than fragrance,

deodorant and hair care, masks and

beard products “exploded.”

“After two months of not going out,

it could finally be the occasion to

grow a beard,” he said.

12

AUGUST 21, 2020

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DETAIL ON RETAIL

PARIS — With the L:A Bruket and

Horace boutiques’ recent openings,

the Rue Vieille du Temple — in Paris’

bustling Marais neighborhood — is

morphing into an ever larger magnet

for beauty shoppers.

The Swedish organic cosmetics

brand and French natural direct-to-

consumer men’s grooming brand’s

doors are a few steps from one other

on the Right Bank street that is

already home to the likes of Aesop

and Rituals.

“It’s one of the most singular streets

in Paris,” said Stanislas Le Bert, deputy

general manager of L:A Bruket. Rue

Vieille du Temple is not only imbued

with centuries of history, but also

draws a large French and international

(when permitted) footfall.

While neither L:A Bruket nor

Horace executives would discuss sales

projections, industry sources estimate

each boutique will generate well upward

of 600,000 euros in its first 12 months,

barring any unforeseen negative

coronavirus-related developments.

L:A BRUKET, 77 RUE VIEILLE DU TEMPLEOn July 28, L:A Bruket — the brand

founded in 2009 by Monica Kylén

and her husband Mats Johansson in

the coastal town of Varberg, Sweden

— opened its Rue Vieille du Temple

boutique, the first embodiment of a

new retail concept.

The 555-square-foot ground-floor

selling space is divided into two

areas, with the first focusing on

L:A Bruket and Horace Open Stores in Paris’ Marais District The Swedish organic cosmetics brand and French natural d-to-c men’s grooming brand’s doors are each on Rue Vieille du Temple. BY JENNIFER WEIL

Inside Horace.

Inside L:A Bruket's store.

13

AUGUST 21, 2020

EYE CANDY

OLIVE OIL IS having a moment, both in and out of the kitchen. Whether induced by quarantine cooking or consumers’ growing predilection for all things clean, olive oil has found its way into baked confections and skin-care products alike. Lifestyle brand Poosh even recently collaborated with a Los Angeles-based bakery on a variety of olive oil cakes.

“Olive oil has so many benefits,”

said Furtuna Skin cofounder Agatha

Luczo. Furtuna is one of the brands

capitalizing on the ingredient’s buzz.

“It’s high in antioxidants and it also

includes vitamins A, D and K, as well

as E. It’s amazing what olive oil can

do for your health,” she said.

Wonder Valley, founded by

husband-and-wife duo Jay and Alison

Carroll, offers a body oil, as well as an

oil-based face wash and body wash,

all sourced from Northern California.

Furtuna Skin, founded by Luczo and

Kim Walls, offers a range of products

all enriched with Italian olive oil

sourced from a 700-acre farm in Sicily.

Both brands hinted at new olive oil-

based products coming down the line.

As for the ingredient’s appeal,

the founders credit its ancient

applications throughout the

Mediterranean. Market experts,

though, credit consumer awareness.

“It’s a hero ingredient consumers

can relate to and understand,” said

Larissa Jensen, beauty industry

adviser at The NPD Group.

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Olive Oil's Moment to Shine

Olive Oil is piquing interest for a slew of different uses. BY EMILY BURNS