11, Nov 2021
Sephora experiencing tough trading conditions
Sephora‘s losses widened in 2020 as it continues to rely on its parent company’s funding.
In 2014, Sephora opened in Australia and sells its own line of beauty products, as well as brands such as Marc Jacobs and Fenty.
The company’s bottom line loss widened to almost $7 million in the 12 months ended December 2020.
The beauty retailer is facing increasing competition from other retailers like Adore Beauty. Adore Beauty‘s sales have remained subdued since its IPO in 2020, while its bigger rival Sephora has gained momentum.
During the pandemic period, women flocked to the salons for beauty treatments, and the demand for products such as Adore grew.
Due to COVID-19, Sephora received $8.5 million in JobKeeper Support and more than $2 million in rent breaks.
The company also took steps to cut costs and slow down its expansion. This led to temporary closures and store closures in Australia.
In addition, the company secured financing from LVMH for at least the next 12 months. This provides the company with the necessary financial support to continue operating.
Sephora is facing increased competition from other retailers such as Mecca Brands and Adore.