The Westfield White City shopping center has become ground zero for the battle for the prestige British beauty shoppers' hearts, minds, and wallets. Competition in the beauty landscape has intensified, with physical retail representing ownable differentiation that presents both an opportunity and a challenge. Last week, SpaceNK unveiled its biggest retail concept to date, and Sephora announced the mall would be the location for its brick-and-mortar return to the UK market slated for March 2023.

The UK beauty market is the sixth largest in the world according to Euromonitor; behind Germany but ahead of France―clocking in at an estimated $29.88 billion in 2022 and projected to reach $40.5 billion by 2027―growing at a CAGR of 6.27%. According to Mintel, 57% of UK adults purchase premium beauty products in-store, but the British beauty retail landscape is fiercely competitive and fragmented, especially once you leave central London.

"The British beauty consumer is educated and discerning in how they shop, both when it comes to brands, quality and price. There are fewer pure play beauty specialists in the UK than the US, meaning that Boots and Superdrug are frequented by most shoppers for convenience, alongside the more speciality beauty stores in question," Stirling Murray, Founder and Managing Director, The Red Tree shared. 

Boots and rival Superdrug have thrived even though many department stores have closed, taking their traditional beauty halls with them. High street retailer apparel retailer, Next, doubled down on beauty in 2019 when they bought Marie Claire’s beauty format Fabled from Ocado. In 2020, they expanded offline across the UK with The Beauty Hall from Next, mainly negotiating deals in space vacated by the collapse of Debenhams department store. And in recent years, there's been a focus on regional beauty concepts like Harrods H Beauty and Flannels, but the regional high street has been the foundation of Space NK's UK footprint.

Murray continued, "UK consumers are highly motivated by newness, always looking for the latest trend meaning that there is a constant competitiveness over the execution of product and brand launches.  Loyalty and retention are constantly being chased by brands and retailers with exclusive products, brands and offers increasingly being used to entice this frivolous consumer."

Prestige Retail Beauty Showdown

Sephora laid the groundwork for reentering the market after exiting in 2005, with the acquisition of Feelunique in July 2021, for a reported $147 million. At the time of the transaction, the online retailer was selling more than 35,000 products from 800 brands, with 1.3 million active customers and shipments of more than 18,000 products daily. The market relaunch got off to a rocky start last October with the rebrand of the Feelunique website and social media channels with Sephora branding―along with the launch of a new app and the addition of 38 new brands to the assortment. UK Beauty junkies expected a full-on Sephora experience and were disappointed by the rebrand. Beyond the first London location, little is known about the brick-and-mortar strategy for the market.

SpaceNK has been the only specialty beauty retailer in the market since Nicky Kinnaird opened the first store in Covent Garden in 1993. The retailer has 75-plus stores across the UK and Ireland. It feels like Manzanita-backed SpaceNK has been in preparation mode for Sephora's relaunch in its home market. SpaceNK has seen solid financial growth, attributed mainly to an investment in infrastructure and a focus on their consumer. Its turnover reportedly rose to £119.1 million ($147.4 million) during the 12 months to March 2022, up  £93 million ($115 million) one year earlier. Last year the retailer opened a new 2,000-square-foot, two-story flagship in its original Covent Garden location, and opened a 2,100-square-foot outpost in the new Battersea Power Station. The evolution of the store experience was coupled with a series of exclusive brand launches in 2022, including Rare Beauty by Selena Gomez, Tatcha, and Jonathan Van Ness' JVN.

Ground Zero Westfield White City 

Located in West London, Westfield White City is one of the largest shopping malls in Europe. Sephora and SpaceNK will compete with each other in this location, and with the five major department stores―John Lewis & Partners, House of Fraser, Debenhams, M&S, and Next―that anchor the mall. In addition, 43 other health and beauty offerings from Boots and Holland & Barrett to numerous branded stores including Aesop, MAC, Charlotte Tilbury, and more, as well as independent service and retail concepts, will compete.

Murray shared, "Westfield is an internationally recognized mall brand. The White City location in particular has high footfall with a great cross section of shoppers. For the right store experiences Westfield is a destination and will attract a wide range of consumers from all walks of life."

SpaceNK Westfield represents an extensive refurbishment of an existing store with a focus on providing an immersive shopping experience and the largest footprint to date at 2,500-square-feet, which is four times the size of the original location at Westfield London. The store features a play table where customers can test products, two treatment rooms offering facials, expert pods for one-on-one consultations, a dedicated fragrance area, and a refill and recycling station for Space NK Hand and Body products and recycling for used beauty packaging from any brand.

Andy Lightfoot, Chief Executive Officer of SpaceNK said of the space, “The store represents the physical evolution of SpaceNK: a more customer centric, welcoming environment with more brands, more choice, more exclusives; all there to be touched and tried together with our expert staff. With more stores to come from our business in 2023, we are proud to continue to innovate, with our customer at the heart of everything we do."

“The opening of SpaceNK’s largest store in its portfolio at Westfield London is testament to our continued investment in our spaces. Health, beauty, and wellness is a rapidly growing sector at our London centers, and the beauty destination’s new flagship store signals the strength and appeal of the brand’s unique luxury offer and customer experience,” said Kate Orwin, Leasing Director UK at Unibail-Rodamco-Westfield.

While there are lots of other locations that Sephora is considering for the future, Sarah Boyd, the new Managing Director of Sephora UK, said the Westfield White City is “that perfect environment where you’ve got the mix between mass market and luxury.” Slated to open in March, the Sephora store will span over 6,000-plus square feet and an assortment of over 140 brands―including many exclusive to Sephora UK, such as Tarte Cosmetics, ILIA, Makeup by Mario, One/Size by Patrick Starrr, GXVE by Gwen Stefani, Skinfix, Vegamour, and Sephora’s own Sephora Collection.

The store will be wrapped in Sephora’s iconic black-and-white stripes, while the interior will feature double-height ceilings, soft geometric shapes, ambient lighting, textured finishes, and greenery. Other features include self-checkout, a central beauty hub, wrapping stations, a space for services such as skin diagnostics, makeup, and a Benefit Brow Bar. Professional services like HydraFacial are being considered.

Katie Wyle, General Manager at Westfield London, said Sephora has been one of the most requested stores by customers. “The launch of their store marks the growth of our beauty offer and will be a landmark moment for beauty fans.”

The UK Beauty Experts Opine

Millie Kendall O.B.E., Chief Executive Officer, British Beauty Council said, "The larger format Sephora lends itself to a Westfield-type environment as it is a strictly shopping destination. I expect a higher basket spend in this store; it's the first one, and people will be heading to Westfield to go there specifically.

SpaceNK has always been a premium town center high street offer. You visit it more often and are more of a regular; there are staff you recognize and it's more community spirited."

I feel there is room for both in the UK and probably in Westfield too! I think a larger format SpaceNK is a really good idea; it’s opening up the best in beauty brands to a consumer it might not have reached before, and as long as they keep that expert advice and service levels, I think the premium and indie brands they stock will continue to thrive.”

Joel Palix, Founder of Palix Unlimited and former CEO of Feelunique believes, "Sephora has high ambitions for the UK, a sophisticated and very competitive beauty market offering probably the highest variety of retail formats in the world. There is pent up demand for its own brand Sephora Collection which was supplied for some time by Sephora US but has not been available to British customers in recent years."

Sephora can leverage the distribution agreements negotiated by Feelunique and its large customer base plus all the  European exclusive agreements it negotiated with up and coming indie brands. It will face tough competition from SpaceNK, Harrods Beauty stores, Next Beauty stores and many more."

SpaceNK recently opened a larger store in Westfield mall showing its intention to fight back but this chain does not have the international clout and the newness appeal of Sephora. Given the current economic climate in UK I expect lots of promotions and price war between all the contenders."

Brand Advisor Stacia Prince shared, "I am interested to see how Sephora performs this time round. They have some exciting exclusive brands like Makeup by Mario that should be a big draw. I’m surprised they have chosen Westfield as their launch store. It does not have the traffic levels of a good major shopping street.

They will have to compete with SpaceNK’s multiple doors in great locations and their fantastic level of service. Most beauty shoppers have a local Space NK, which is a huge positive [and] the rapport with a team, which gives the shopping experience a very personal feel.

Ultimately, it’s about brand assortment, but with bricks and mortar gaining traction again, the in-store execution is of paramount importance. With both retailers having locations at Westfield White City, it will really be down to brand awareness and marketing activities. I hope it won’t become a promotion war."

Stirling Murray, Founder and Managing Director, The Red Tree shared, "Even before the covid pandemic and the evolution to online shopping, retailers and brands have been required to give customers a reason to visit their stores. Creativity and focus in this area can reap rewards in the form of brand loyalty, customer retention and dwell time.  Experiential environments are currently being best executed by brand pop ups (such as Kylie Cosmetics) and as British consumers we’ve been impatiently waiting for pure retail environments to catch up. 

For both SpaceNK and Sephora, these new Westfield flagship environments bring the ability to offer creative store experiences and services that can’t be replicated via online shopping. SpaceNK has a loyal and affluent consumer base as well as great regional presence. We have already seen SpaceNK lean into store experience with their focus on treatment rooms, branded events and refill stations in their newest stores such as Westfield." 

Sephora on the other hand has international recognition as forward thinking beauty retailer and a wider customer demographic. The Westfield Sephora is being rumored to be the flagship for Europe so I expect boundaries to be pushed with regards to the use of customer service, education, technology (including AR, VR and more) as well as services."

For a long time the British beauty retail landscape has been lacking in true innovation and the healthy competition from these two major player will undoubtably ignite this. That being said, given the differences in core consumers there is space for both to co-exist successfully.  All bets are off in the British beauty retail environment, it’s all to play for."

Retail Strategy Advisor Wizz Selvey believes, "Sephora has a great opportunity to launch in the UK with a fan base of beauty consumers who have shopped from Sephora while abroad and the huge database they acquired from Feelunique.

The challenge will be how competitive beauty retail is in the UK; the department stores hold a big market share in London and key cities, and there [are] a lot of new entrants to beauty over the last three years, from Next, Flannels, H Beauty, and Boots expanding their premium beauty experience.

Physical retail for beauty is an important part of the consumer journey in the UK. SpaceNK has always had the advantage of physical retail in some great locations throughout the country and built a very loyal customer base."

The Future 

While Sephora has been tight-lipped on brick-and-mortar rollout, Boyd confirmed they are planning for more stores, looking at locations, talking to landlords, but said, "fundamentally we want to understand what happens when we open our first store.” WWD reported Sephora had viewed space at the new Battersea Power Station in South London, which opened last October. SpaceNK debuted its new flagship design in the converted former turbine halls and is currently the only multibrand beauty retailer in the new development.