Just over 20 years ago, Sephora opened its first UK store. But intense competition from Boots and prestige beauty retailers such as Space NK was too much for the LVMH-owned beauty chain. Within 5 years, Sephora shuttered its nine British stores.
The UK is the third largest beauty market in Europe behind Germany and France. Following Brexit, Sephora no longer delivers products to the UK because of high duties.
To extend its European footprint and return to the British market, Sephora has acquired Feelunique, the prestige beauty e-tailer valued at AUD$247 million, from majority stakeholder, Palamon Capital Partners.
Feelunique, founded in 2005, has 1.3 million active customers and offers 35,000 beauty, skincare and haircare products from more than 800 brands. The vast majority of the company’s customers are Gen Zers and Millennials and annual sales reached AUD$224.5 million in 2020.
The e-tailer also stocks accessories, beauty devices and sexual wellness products and has dedicated websites in France, Germany, Norway, the US and China. In addition, Feelunique ships to more than 120 countries.
The buyout comes hard on the heels of Sephora’s recent longterm partnership deal with Zalando, the Germany-based lifestyle and fashion retailer, to bolster its prestige beauty offering.
The transaction is a key step in Sephora’s European growth strategy, said Martin Brok, president and CEO of Sephora. “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.”
Feelunique was last up for sale at the end of 2018 but none of the potential bidders, including ASOS, agreed to the company’s valuation of AUD$374 million.