The sweet smell of success

Gilles Dougoud, general director, Sephora Polska: This year we are planning to open several new stores. How many? This depends on the opportunities that arise. We currently have one confirmed location in the Atrium Felicity shopping centre [being developed by Atrium European Real Estate – editorial note] in Lublin. We are considering openings in two other malls, but the contracts have not yet been signed.

Are you interested in entering malls that are already present on the market?
Two potential locations for new stores that have not yet been confirmed by contracts are in centres that are already open. Of course, we expect fewer new mall openings in the future than over the last ten years, which is why our development will be focused on existing centres and remodelling our perfumeries in such locations. There is also another way – high streets. In Poland high streets are less popular and less developed than in other European countries. If cities here paid more attention to them, they would certainly be an alternative for Sephora.

What factors do you consider when choosing new locations?
First of all we consider the character of a given mall. We look at centres that are modern and ensure a prestigious location. They also need to have good transport links and customers should be able to access them without any problems. We choose centres that are best suited to their environment and customer requirements – those that represent quality. Another factor is the potential of the city and the wider location. We focus on cities with more than 100,000 inhabitants. We also pay attention to the tenant mix. This is very important when considering malls that are already open. Also the density of perfumeries in a given location is important for us. If there are 6–8 perfumeries near one another, then we will certainly not choose such a place.

You are currently modernising your stores. What does the new image of the perfumeries involve?
Let’s start with the fact that the Sephora store concept is uniform – our stores always look similar regardless of the country. In Europe in the 1970s, perfumeries were laid out completely differently. First of all you were not able to touch the goods. The products were located behind the counter and the customer was dependent on the seller. The idea of removing the counter came later. This was a revolution in those days. There were questions about the security of the sales staff, the shoplifting or the location of the cashier in the shop. One of our main slogans is: freedom. This was conceived together with the opening up of the shop to the customer. And it has been constantly renewed over all these years to bring us even closer to the customer. So the modernisation of the stores that is currently in progress in Poland is not a new concept. It is a continuation of the ambition to fulfil our slogan of freedom. We are focusing on the ease of access, the ease of the shopping experience and educating the customers. We want customers to get to know the new brands in our shops and to have easy access to their favourite cosmetics – as well as the opportunity to explore completely new categories such as the ‘BB’ and ‘CC’ creams displayed in-store on separate islands. We have also introduced screens displaying make-up shows – and LED lighting. We have selected the kind that differs the least from the daylight, which is very important when choosing make-up. We are planning to refurbish all 92 shops in Poland and this will take 5–6 years.

When is Sephora planning to launch its online store?
Our online shop will start operating in 2014. It is virtually finished, but we are now working on the details because we want it to be the best online shop in Poland. The e-shop is a perfect tool for us and we are making sure that it meets the highest standards in terms of the technical quality, usability and the offer. We are using the experience of our entire chain, including the solutions which are applied in the United States.

Is Poland a promising market?
The demographic processes are admittedly not very dynamic in Poland. However, the luxury cosmetics market makes up a smaller share of the cosmetics business as a whole than in more mature markets. It constitutes 10 pct of the entire market value in Poland, whereas in North America and Western European countries the ratio is around 25–30 pct. Besides, there is no tradition of luxury brands here. In other countries they have been present for over 50 years. We have experienced a slight economic slowdown over the last 1.5 years, but the luxury cosmetics market has not suffered significantly. Meanwhile, rent levels in Poland have grown alarmingly over the last ten years, whereas revenue levels per sqm have not increased at the same pace. This will result in some brands exiting the market.