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LVMH Lipstick Growing Bigger Than Bags as Vuitton Slows: Retail

Theres no multibrand competitor that covers as many regions as Sephora, and rivals such as Ulta in the U.S. and Nocibe SA in France lack the resources it enjoys with backing from LVMH. Sephora has 27 percent of the beauty retail market in France, 12 percent in the U.S. and 15 percent in China, Sanford Bernstein says. At Sephoras outlet on the Champs Elysees, products such as 30.30-euro Dior Iconic false eyelashes sit a row down from the retailers house-label 9.90-euro extensions. Well-known brands, loyalty cards and services such as nail bars near the entrance lure shoppers inside, while arranging merchandise by category lets clients choose from similar products at a wide range of prices. Vodka Tonic Their business model is very clever, said Joel Palix, president of Clarins Fragrance Group, which distributes its Thierry Mugler scents through Sephora. Stocking exclusive products means Sephora can limit discounts, while private-label merchandise yields high margins, he said. Its a similar story at DFS. The company was founded in the 1960s, and LVMH bought a stake in 1996.

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