Another step towards the increasing concentration of the French selective perfumery: the two biggest independent retail networks, Beauty Success and Passion Beauté, decided to create a joint venture, Beauty Alliance France, to consolidate their purchases and coordinate their trade marketing plans. Each of the two founding entities owns half the shares of the new structure, which will be co-managed by Philippe Georges for Beauty Success and Jean Pierre Dry for Passion Beauté and led by a steering committee of eight people, four from Beauty Success and four from Passion Beauté.
To weigh on the market
Thanks to this alliance, the market share of the two retailers exceeds 10%. “The required threshold to weigh on the sector,” said the two leaders.
Beauty Alliance France, the result of the union of the two retailers ranks fourth in France, with a market share of about 11% in 2014 and 450 beauty shops, including 400 beauty salons, employing 2,400 staffs and a cumulated turnover estimated at 330 million euros in 2014.
In a context marked by the recent acquisition of Nocibé by Douglas, creating the leading French retail network in terms of doors, Beauty Success and Passion Beauté probably had no choice but to agree on what they call themselves an “alliance of common sense.” Today, the three leading beauty retailers in France - Sephora, Marionnaud and Nocibé-Douglas - represent 75% of the market, all of them enjoying a European or global size. Beauty Success and Passion Beauté also expect the competition from e-commerce to increase, in particular from pure players such as Amazon.
“The digitization of points of sale and the creation of an effective CRM also involve heavy investments. These are key issues and cannot afford to be left behind,” says Philippe Georges.
15% market share in 2019
Beauty Alliance France also becomes a member of Beauty Alliance International, the European umbrella organization for independent beauty retail networks in Germany, Austria and Switzerland. In Germany, the Beauty Alliance gathers 900 beauty shops, ranking second behind Douglas, and holds 22% of the market.
Of course, this success inspired Beauty Success and Passion Beauté to create Beauty Alliance France. Both retailers intend to leverage on their assets (proximity, sense of service and entrepreneurship) to become a valuable alternative for beauty brands. “Our two networks are mostly established in medium and small cities and enjoy a good geographical complementary. Strongly rooted in their territories, our entrepreneurs have a very good knowledge of their customers,” highlights Philippe Georges.
The two leaders bet on a significant growth in their market share from 11% today to 15% in 2019, with a turnover of 420 million euros. The obligation made to Nocibé-Douglas by the French anti-trust authority to sell 38 stores, including 25 franchisees, could help the Beauty Alliance France to reach its ambitious goal. “The new Alliance would be happy to welcome these entrepreneurs,” commented the two managers.