LI firm expands to build Sephora displays for inside 850 Kohl's stores

A Melville manufacturer of store displays used in selling cosmetics, perfume and skin care products is expanding to construct at least 850 Sephora shops inside Kohl’s department stores nationwide, officials said.

D3 LLC plans to rent 18,840 square feet of additional space at 70 Maxess Rd., where it already uses 36,530 square feet to design and produce cosmetics displays for airports and cruise ships.

The company also plans to make improvements to 20 Melville Park Rd., its headquarters and manufacturing hub for displays found in Sephora stores, and 75 Marcus Dr., where displays are made for Macy’s, Bloomingdale’s and other department store chains.

The expansion is expected to cost $3 million and add 65 jobs to D3’s workforce, which averages 191 people, according to its application for tax breaks from the Suffolk County Industrial Development Agency.

Last month, the IDA board voted unanimously to grant $980,000 in tax aid to the company, including $935,550 off property taxes over 10 years, or a 27.5% savings.

D3 CEO Louis Dupere said the installation of Sephora cosmetics shops inside at least 850 Kohl’s stores by 2023 "is our biggest business right now." Each Sephora selling area will occupy 2,500 square feet in the Kohl’s stores.

Sephora + Kohl's on LI

Kohl’s announced in February that 200 Sephora selling departments would debut this fall across the country, including at the Kohl’s stores in Bay Shore, Jericho, Levittown, Massapequa, Oceanside, Ronkonkoma and Shirley. The department store chain has 11 locations on Long Island.

The Sephora + Kohl's project "is the growing part of our business," Dupere told the IDA board, adding D3’s revenue totaled $60 million last year compared with $100 million in 2019. He said the company’s customers were forced to shut down a year ago to slow the coronavirus’ spread.

D3 has introduced displays with digital technology that personalizes the shopper’s experience by linking their cellphone with the display. The company also fixes broken displays and recycles old ones.

"We have to pivot from more of a manufacturing mentality to a service mentality," Dupere said. "This is what we are investing in."

D3 is a division of DIAM International, a nearly 50-year-old French displays company with offices in 20 countries and 2,400 employees. The Melville operation opened in 2006 and now consists of 216,000 square feet in five buildings. It serves retailers in North and South America.

Tax breaks' benefits

Besides Long Island, D3 has operations in Miami, California, Mexico and Brazil.

"The cost of operations, including wages and taxes for both employer and employee, is lower in Miami, and therefore, a very attractive alternative to Long Island," Dupere wrote in the application for IDA aid. The company could start diverting its business there if tax breaks were denied, he wrote.

IDA board members said D3 is the type of business that the agency was founded to support, citing the average employee pay of $69,000 per year.

Kevin Harvey, vice chairman of the IDA, said Suffolk County will see $40 million to $50 million in new wages and benefits paid to D3 employees over the 10 years that the company saves about $1 million in property taxes. "That’s a pretty good investment for the county," he said.

About 30% of D3’s new hires are graduates of Stony Brook University and Farmingdale State College. Records show the company funds a scholarship at the latter.

IDA executive director Anthony J. Catapano said Estee Lauder Inc., which has a large factory and research laboratories in Melville, is among D3’s customers. "The cosmetics industry is growing and is an important employer in the county," he said.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.