Justine Le Sassier wouldn’t be caught dead buying a Louis Vuitton handbag. “They don’t have any appeal,” the 18-year-old art student says while shopping on the Champs-Elysées. Happily for Vuitton’s owner, LVMH Moët Hennessy Louis Vuitton, even if Le Sassier won’t shell out $1,300 for a purse, she’s crazy about the €13.90 ($18) foundation sold by Sephora, LVMH’s fast-growing international fragrance and cosmetics chain. “I love their makeup,” she says. “And it’s reasonably priced.”
With Vuitton’s sales growth slowing from Barcelona to Beijing, catering to beauty product buyers such as Le Sassier is becoming more important for LVMH. That’s where Sephora—a glitzy one-stop shop for cosmetics and fragrance lines such as Lancôme, Bobbi Brown, Acqua di Parma, and many more—shines. A host of accessible items like $31 Dior Addict Lipsticks from Sephora will help LVMH’s Selective Retailing unit overtake fashion and leather as its biggest business by 2018, Sanford C. Bernstein estimates. Last year the division, which also includes the Paris department store Le Bon Marché Rive Gauche and two duty-free shop operators, accounted for 28 percent of sales, leaving LVMH better set than rivals such as PPR to weather stagnating luxe demand. “Sephora is a category killer,” says Sanford C. Bernstein analyst Mario Ortelli.
