Luxury department store to open beauty standalone as part of innovation plans
Luxury department store chain Harvey Nichols is to open a beauty-only standalone store and is considering other new store concepts in an attempt to maintain growth in the stagnant UK market.
Harvey Nichols chief executive Joseph Wan said it will open a beauty-only store, called Beauty Bazaar by Harvey Nichols, in a “prime retail site” at an undisclosed date. It follows the success of a similar store that opened in Hong Kong in December.
He said the new concept, likely to be between 15,000 sq ft and 18,000 sq ft, is part of “plans to find avenues for growth in difficult times in a saturated UK market”.
Wan said the beauty emporium would carry high-end brands, and he wanted those brands to create exclusive lines for the retailer. He is aiming to exploit a gap in the market for luxury standalone cosmetics and perfume stores. He will roll out the format if successful.
Wan is also considering opening fashion-only standalone stores once Harvey Nichols has established its own-label offer, and a Harvey Nichols eaterie or wine bar to “compete with the likes of Starbucks”, he added.
Wan said: “I do not want Harvey Nichols to say: ‘We are saturated in the UK and there is nothing we can do’. There is always something we can do and I don’t want to sit still.”
Wan said that it was essential for the business – which he revealed increased profit by 15% to £16.1m in the year to the end of March – to consider innovative ways to grow as even the most upmarket of shoppers spend less in the current troubled trading environment.
Like-for-like growth at Harvey Nichols has slowed since the end of the retailer’s January Sale, he said. In the 2010 calendar year, like-for-like sales rose 7%, but have slipped to just 3% in February and March and fallen further in the past two weeks. The Knightsbridge store is performing only marginally better than Harvey Nichols’ regional stores.
Wan attributed the decline to the lack of “feel-good” factor for Harvey Nichols’ shoppers but said that the business must not “sit still” during tough times.
He said: “Shoppers are not feeling great. When people feel high they will go out entertaining and shopping and they will go out for two items and have 10 or 12 bags when they leave. Now they only leave with those one or two purchases.”