LVMH-owned beauty retail heavyweight Sephora has agreed to buy online cosmetics retailer Feelunique in a deal that marks its first big push into the UK.
The acquisition, which is subject to clearance by anti-trust authorities, is expected to be closed during the 2nd semester of 2021, according to Sephora. The amount of the transaction has not been disclosed, however British media have mentioned a total amount of 132 million pounds sterling (about 154 million euros).
First foray into the British market
“The transaction is a key step in Sephora’s European growth strategy and marks a first step for Sephora’s presence into the United Kingdom,” commented Martin Brok, President and CEO of Sephora in a release.
According to Sephora, the United Kingdom is one of the top 10 biggest prestige beauty markets worldwide, with a very high level of digital adoption. “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,” adds Martin Brok.
However, Boots’ strong positions in this market has long been a big hurdle for the French group.
Founded in 2005, Feelunique is a fast-growing business. To date, the e-commerce player claims 1.3 million active customers and stocks over 35,000 cosmetic and fragrance products from some 800 brands and ships to more than 120 countries worldwide, with a strong focus on the UK market.
Earlier this year, Feelunique announced a record-breaking 12 months for the financial year, ended 29 March 2021 with sales increasing by 26%, in context where online purchases surged due to the global pandemic. Earnings before interest, tax and one-off costs (EBITDA) reached £2.5 million - up by £7.5 million from an EBITDA loss of £5 million the previous year.
The acquisition of this key pure player also is also in line with Sephora’s ambitions digital ambitions. While not in the same league as Sephora’s global market share, Feelunique is a major player in the British e-commerce beauty market competing with sites such as Lookfantastic (The Hut Group) and Cult Beauty. Furthermore, Feelunique makes most of its sales with millennials and Gen Z consumers.