Sephora Net Worth: Building a Billion-Dollar Beauty Brand

LVMH took ownership of Sephora in 1997 in a deal worth $262 million. Sephora’s annual revenue has recently been around $16 billion, which is a large part of LVMH’s overall earnings.

Sephora was founded in 1970 by Dominique Mandonnaud, and it wasn’t long before it stood out to customers. That’s partly thanks to its selling model of letting customers try out the products before buying them. This approach to product testing helped propel Sephora to the forefront of the growing beauty industry.

By 1992, Sephora finally turned its first profit, around $43,000. In 1996, it opened its flagship Champs-Élysées store.

Sephora Revenue

Sephora’s revenue has been consistently climbing each year, demonstrating the brand’s dominance in the beauty industry. Data from 2023 shows that revenue was $16 billion globally, up from $14.5 billion in 2022, a sign of Sephora’s continuous growth. Although LMVH doesn’t break down revenue by brand, as a major stream of income it does announce some figures for the brand.

Here’s a breakdown of Sephora’s revenue over the past four years:

The company has been expanding rapidly around the world, with stores across 35 countries. Its website is one of the top spots for beauty brand searches globally. Indeed, online sales accounted for around 1/5 of total revenue with around $3 billion coming from the website. It is forecasted to make around $3.6 billion from online sales in 2024.

According to the parent company LVMH’s 2023 Annual Results, it had a record year with €86.2 billion ($93.26 billion at the time) in revenue, a 9% increase from the previous year. €22.8 billion ($24.66 billion) came from recurring operations, an 8% increase from the previous year.

Sephora also had a record-breaking year for both revenue and profit. The financial statement specifically noted its performance in North America, Europe, and the Middle East, and an increase in market share gains. Also notable is the renovation of the Champs-Élysées store in Paris; the flagship store has been entirely renovated, and before closing, had 10,000 visitors per day on average. Also of note in the LVMH reporter was the collaboration with major department store Kohl’s in the US.

Who Owns Sephora?

Sephora is owned by LVMH Moët Hennessy Louis Vuitton, which acquired the company in 1997. Sephora originally began as a small perfume shop in 1969, located in Limoges, France. It was founded by Dominique Mandonnaud and became popular among customers for the unique shopping experience it offered them. That is, customers could try the products before buying them.

Sephora’s appeal to shoppers didn’t go unnoticed by luxury goods conglomerate LVMH, who took it over in 1997. In 1998, Sephora opened its first store in the US in New York City.

There are now 2,700 Sephora stores worldwide in 35 countries.

Who is the Sephora CEO?

Guillaume Motte became the CEO of Sephora in 2023. He had already worked at LVMH before taking over the role, having led other divisions of the conglomerate.

Here’s a rundown of Sephora’s past CEOs:

Martin Brok only served two years and reportedly stepped down due to a “divergence of views” according to an internal release cited by Women’s Wear Daily. The company’s leadership has remained stable, which has helped maintain its growth trajectory.

Sephora Company History

Sephora is a global retail beauty icon that began as a small perfume shop in 1969. Its revolutionary retail model of allowing customers to sample products before purchasing paved the way to global success.

Dominique Mandonnaud created Sephora with the concept of an “assisted self-service” sales experience. This meant that customers were encouraged to walk around and test products before they purchased them, distinguishing them from typical cosmetics stores that didn’t have this option.

The Sephora collection of perfume chains was born of a collaboration between Boots PLC and Nouvelles Galeries.

1969 – 1970: Shop 8 Beginnings

Before Sephora was Sephora, it was a small retail space specializing in the sales of perfumes, started by Dominique Mandonnaud in Limoges France named Shop 8. His plan to stand out from the competition by allowing customers to try out products in the store worked wonders.  This idea of product testing didn’t follow the common retail model in the industry at the time.

The beauty products, such as perfumes, were set up in the store not according to brand, but instead according to the type of cosmetics product they were. Naturally, customers are more likely to buy a perfume if they know they like the scent.

Sephora’s first Paris store opened in August 1970 — but not by Dominique Mandonnaud (he wouldn’t acquire it until 1993, which we’ll talk about below). Instead, it was opened by Boots in the UK.

1971 – 1992: Sephora Expands

Sephora and Shop 8 continued to sell beauty products as separate entities. Then in 1971, the UK pharmacy chain Boots partnered with Nouvelles Galeries, a department store group, to begin the Sephora beauty stores. However, these early Sephora stores didn’t make many sales or much revenue in the beginning.

By 1984, Dominique had opened four Shop 8 stores. Promodes, a rapidly growing distribution group acquired Sephora. However, the relationship was rocky, especially because Promodes wanted to focus on expanding its reach in the food industry, not the beauty and cosmetics industry.

Shop 8 and Promodes separated in 1987, and Shop 8 picked up eight perfume stores in Paris.

While the self-service model was indeed revolutionary at the time, it was a challenge to find its niche in the French market in the company’s early years. However, after years of losses, it made its first profit in 1992 of FRF 270,000, ($43,200 at the time). This was from revenues of FRF 606 million ($112 million).

1993 – 2002: Merges and Expansions

CEO Mandonnaud purchased the Sephora chain of stores in 1993, effectively merging the 38 existing Sephora stores with his 12 existing Shop 8 stores. Shop 8 became Sephora and Mondonnaud rebranded the other stores.

Sephora opened its flagship store at Champs Elysées, in 1996. That same year, Sephora partnered with JCPenny in the US, opening mini-stores inside JCPenny stores.

In 1997, Sephora was acquired by LVMH Moët Hennessy Louis Vuitton, giving the company the financial backing it needed to expand. LVMH agreed to pay $262 million and since then, Sephora has continued to grow and break its previous records for revenue and profit.

In 1998, Sephora expanded across the Atlantic, opening its first store in the US in New York City, on what was dubbed “Skin Row” at the time, 555 Broadway.

Sephora’s modern growth took off with its digital business strategies. Sephora.com launched in 1999 as the company’s entry into the ecommerce market with an online store.

2003 – 2009: Partnerships, Awards, and New CEO

Jacques Levy became the CEO of Sephora in 2003 and led its redevelopment, including the rollout of the Sephora brand line of makeup and beauty products.

Beauty Insider was founded in 2007 and became Sephora’s affiliate program. It was created to give Sephora’s long-term clients benefits for their loyalty. With every beauty product purchased from Sephora stores, shoppers earn points. Earning more points takes the buyer to new levels in the rewards program, making them eligible for small beauty and makeup gifts.

Also this year, Sephora expanded to the Middle East, opening more than 40 stores in Saudi Arabia and the UAE.

2010-2020: Mobile App Focus on Eco

In 2010, Sephora developed its mobile app, allowing customers to learn about products from their phones and scan barcodes to read reviews. The app also lets users sync their Beauty Insider loyalty accounts on all devices.

Through the second decade of the 2000s, Sephora’s revenue rose and Sephora launched its own line of Sephora skincare products. This era also saw the introduction of the brow bar, smile bar, and nail bar — where customers could get aesthetic treatments done in-store.

When music superstar Rihanna launched her makeup and skincare brand in 2017, it was stocked exclusively in Sephora stores.

in 2018 Sephora began to plan its expansion into India. It also launched its Clean Beauty line of products, starting with 50 brands (now 133 brands).

In 2020, Sephora launched one of its largest stores in Kuala Lumpur, Malaysia, with 17,000 square feet of retail space.

Also around this time, and during the pandemic, Sephora and JCPenney parted ways, ending a rocky relationship. In a 2020 lawsuit, JC Penney took Sephora to court claiming the cosmetics brand had threatened to leave their contract early. The suit was settled with Sephora agreeing to keep some retail space with a slow wind-down of the relationship.

2021 – Present: Kohl’s Partnership

In 2021, Sephora, free from its former partnership with JCPenney, officially partnered with Kohl’s. The partnership bolstered the struggling US retail giant whilst giving Sephora access to a broad US market.

By 2023, Sephora expanded to 3,000 brick-and-mortar stores globally, with stores in 35 countries.

The company is aiming to be an incubator for indie cosmetics brands, wanting to replicate the success story of Huda Beauty – a Middle Eastern lash brand that was first stocked in Sephora and is now a global, multi-million dollar brand.

SEPHORiA

SEPHORiA is Sephora’s annual beauty event, which brings beauty lovers together over a weekend in a carnival-like atmosphere. The event includes master classes taught by industry icons, Instagram-able moments, unique spaces and experiences, and an overflowing swag bag.

SEPHORiA began its journey in the US in Los Angeles in 2018, where it quickly gained popularity as a cult beauty event. It went to Paris for the first time in 2023. It was also trialed in China and was considered an absolute success according to Maggie Chan, the managing director of Sephora Greater China in an interview with PR Newswire.

Sephora Controversies

Sephora’s reputation is overall positive, but it has run into its share of controversies.

2019 Sephora Racial Profiling Incident

In 2019, the famous singer and songwriter SZA, who used to work at Sephora, tweeted about the racism she experienced while shopping there years later. SZA was shopping for Fenty Beauty products – the line from Rihanna – and a Sephora representative called security because she thought the singer was stealing.

Lmao Sandy Sephora location 614 Calabasas called security to make sure I wasn’t stealing . We had a long talk. U have a blessed day Sandy

— SZA (@sza) May 1, 2019

After this incident, Sephora shut its US brick-and-mortar stores for a week to hold diversity training for the whole staff. The training was the first phase of its We Belong to Something Beautiful campaign, which the company claimed was not a result of the tweet from SZA, although the timing suggested otherwise.

The company also responded by launching its 15% Pledge, wherein 15% of beauty products sold at Sephora would come from Black-owned businesses.

Soon after the store closed for diversity training, actress and comedian Leslie Jones called for a boycott of Sephora after her makeup artist was mistreated at one of the stores in New York. Her makeup artist reportedly called Jones in tears, saying that she and her friend were treated very badly by a salesperson and a manager.

 

View this post on Instagram

 

A post shared by Leslie Jones (@lesdogggg)

Fallout with JCPenney

During the pandemic, Sephora and JCPenney entered into a legal dispute. The two companies were collaborating with mini Sephora stores inside JCPenney locations. Sephora wanted to end the partnership with JCPenney, which was struggling financially. The 122-year-old retailer said that if it lost the partnership it would cause irreparable injury, and filed a temporary restraining order against Sephora.

Eventually, it ended its collaboration and Sephora began its partnership with Kohl’s.

Sephora Boycott for Isreal and Palestine

In 2023, Sephora began receiving negative feedback from customers on social media over a brand of makeup it sells. The owners of SimiHaze called the shooting of three Palestinian students a Zionist hate crime — leading people on X to accuse Sephora of being antisemitic. While we aren’t certain what the motivation behind the shooting was, there are indications that it was indeed a hate crime, and it is being investigated as such.

Sephora also sells the brand Huda Beauty, whose founder has been very vocal about her pro-Palestine stance, urging others to call for Sephora to discontinue selling the brand.

@jeantheperfumequeen

Sephora isn’t pro-Palestine. So let’s rise and boycott! #propalestine #boycottsephora #perfumetok #perfume

♬ original sound – Jean the Perfume Queen

It’s not clear what Sephora’s stance is on the Isreali-Palestinian conflict, and to further muddy the waters, there is a Change.org petition accusing Sephora of being pro-Palestine for selling Huda Beauty, and another Change.org petition accusing Sephora of being pro-Israel for selling skincare products from companies funded by Israel.

Sephora Kids Controversy

Gen Alpha, those born starting in 2010, are spending more on skincare than any other age group according to a report by AYTM, spending $4.7 billion in 2023. This gave rise to the term “Sephora Kids”.

Sephora Kids have taken to social media to show off their skincare routines that involve high-end skincare products that have ingredients like vitamin C and even retinol for anti-aging. The Sephora collection includes brands like Drunk Elephant, Bubble, and Byoma which have recently become more popular with young customers, with parents sharing their unease with the situation.

 

The main problem is that critics are concerned that some of these skincare routines and products, especially those containing retinol, may not be suitable for developing skin. Others argue that kids shouldn’t feel like they need to buy a bunch of cosmetic products.

Another growing concern is the frustration of customers – namely those 30 and up – who used to enjoy going to Sephora, but now find it overrun with children.

What Can We Learn From Sephora?

There are plenty of lessons to be gleaned from Sephora’s rise to greatness. From its ability to stay relevant and grow in a competitive beauty industry, to how it has largely managed to avoid the spotlight when it comes to negative press, Sephora has built a globally successful brand.

Sephora’s partnerships, like the current one with Kohl’s, have helped it maintain its presence in the physical retail landscape, even as the trend shifts to digital. Additionally, switching to Kohl’s from JCPenney during the pandemic was a shrewd pivot.

It also demonstrated digital prowess by selling online starting in 1999, putting it well ahead of many of its competitors. It focused on creating an omnichannel experience, helping to keep it relevant as consumers turn to online shopping.

Further, Sephora prides itself on its diversity and inclusivity, with initiatives like its 15% Pledge, to sell 15% of products from Black-owned brands. Additionally, partnerships like that with Rihanna’s Fenty Beauty show its commitment to embracing modern beauty trends.

However, the racial profiling incident with SZA in 2019 highlighted the need for the company to address problems in the company culture and customer relations.

Overall, Sephora has been able to evolve with the market, and even stay ahead of trends, from its try-before-you-buy model to leading retailing in ecommerce.

To maintain its leading edge in the industry Sephora needs to maintain its commitment to listen to its public when it makes mistakes, and actively make corrections to company culture as well as surface and nurture brands of the future in the same way it did with Huda.

FAQs

How big is Sephora?

Sephora is a leader in omni-retail with over 2,700 stores in 36 countries around the globe. It has over 500 stores in the Americas and continues to expand.

What is Sephora’s current revenue?

In 2023, Sephora brought in retail sales of around $16 billion globally. This was up from the previous year when revenue was around $14.5 billion.

Why is Sephora not in Japan?

Sephora was in Japan, but it left the Japanese market in 2001. Some reasons for this include Japan’s economic downturn, the competitive cosmetics market in Japan, and the inability to connect with Japanese culture.