When it comes to retail cosmetics competition on Long Island, you win some, you lose some.
The two largest specialty cosmetics retailers in the nation — Sephora and Ulta Beauty — are each adding two new stores on Long Island as part of their nationwide expansions this year. But small chain e.l.f. Cosmetics last month called it quits for its brick-and-mortar stores, taking out five local shops with that decision.
The shake-up can be blamed on the economy, one consumer goods expert said.
Sephora will open 35 stores in 32 cities this year, including locations in Oceanside and Lake Success, the retailer announced Monday.
Sephora, which is owned by French luxury goods group LVMH Moët Hennessy Louis Vuitton and has U.S. headquarters in San Francisco, is not yet disclosing the addresses where the new stores will be located.
“At Sephora, we are constantly working to further enhance, personalize and simplify the omnichannel experience [shopping in stores and online] for our clients, so the connection between the physical and digital is virtually seamless and highly customized at every touch point,” said Mary Beth Laughton, executive vice president of omni retail at Sephora, in a statement.
The chain sets itself apart by allowing customers to sample a wide range of makeup and skin care products and offering customized services, said Alison Gaither, an analyst in beauty and personal care at Mintel, a London market research firm with a U.S. base in Chicago.
“They really provide this kind of idea that [employees] need to apply a product to everyone who walks in,” she said.
There are more than 460 Sephora stores across the Americas, and 660 locations inside J.C. Penney department stores. Seven Sephoras are on Long Island, two of which are in J.C. Penney stores, in Westfield South Shore mall in Bay Shore and at the Roosevelt Field mall in Garden City.
On Feb. 26, e.l.f. Cosmetics, a budget brand of makeup, closed all 22 of its stand-alone stores, including five on Long Island at Westfield South Shore mall, Smith Haven Mall in Lake Grove, Plainview Shopping Center, Roosevelt Field mall, and Walt Whitman Shops in Huntington Station. It plans to focus on selling its products on its website and in national retailers’ stores, according to its quarterly financial report.
Rite Aid, Walmart, Target and Ulta are among the retailers that sell e.l.f. products.
Founded in 2004, Oakland, California-based e.l.f. (the letters stand for eyes, lips, face) started as an e-commerce brand, and its 22 stores contributed only 5 percent of its $267 million in net sales in 2018.
Instead of major revenue drivers, the stores "were viewed more as a showcase, a way to have a place where consumers could stop in and see and touch … and purchase the product,” said Linda Bolton Weiser, a senior research analyst at D.A. Davidson & Co., an investment banking firm in Montana.
Meanwhile, Ulta, which has salons in its stores, including 11 on Long Island, is moving ahead with its previously reported plans to open two new local stores this year — in Bridgehampton Commons this summer and South Port Shopping Center in Shirley in the fall.
As of Feb. 2, Ulta had 1,174 stores nationwide, and it plans to open 155 more by the end of fiscal year 2020, the Illinois company said.
A strong economy is a factor in the beauty shake-up, as both Sephora and Ulta sell prestige, or high-end, beauty products, though Ulta offers a mix of price points, Weiser said.
“Women will trade up and splurge and buy the prestige products,” she said.
The U.S. prestige beauty industry reached $18.8 billion in sales in 2018, a 6 percent increase from its sales in 2017, according to The NPD Group, a Port Washington market research firm. But within the prestige industry, makeup, the largest category, grew only 1 percent to $8.1 billion in sales in 2018. Skin care sales in the prestige industry increased by 13 percent to $5.6 billion.