Beauty and cosmetic operators proving to be the best retail performers

Applying make-up is sometimes referred to as putting on war paint.
Given the way beauty and cosmetic operators have taken over as the best-performer in retail, they have not only won the battle but are declaring victory in the war. It is a category killer that will survive.

And it's big business. According to IBISWorld, the cosmetic and toiletry retailing industry is worth about $5 billion a year. For department store landlords, the average moving annual turnover is about $60,000 a year for their cosmetic sellers.

A 400 square metre stand-alone store in a prime CBD location, on average, turns over about $16 million a year, generating about $40,000 a year in sales - and growing.
These are figures that traditional apparel retailers dream of and reflect the changing mood of consumers.

Shoppers want an experience when they shop and beauty products offer just that. Instant gratification, a feel-good factor and getting a range of products that can be used longer than a pair of shoes that are usually worn once and retired to the back of the cupboard.
Sephora and Mecca have led the charge, with the South Korean Innisfree the new entrant.

Adding to sales, men are embracing grooming and manscaping with gusto.

Matt Hudson, the national director and head of retail leasing at Cushman & Wakefield said cosmetics and beauty are some of the fastest growing tenants in the city and suburban malls.
''Cosmetics allow the consumer access to luxury brands and experience at an affordable price,'' Mr Hudson said.

''Beauty retailing is the backbone of department stores and offer some of the strongest sales per square metre for landlords. From a yield perspective, the returns are some of the best margins for the operator and landlord.''
In Melbourne, Mecca Maxima opened its latest flagship store at GPT's Melbourne Central mall on Friday. It will be a new-look 395 square metre site. MECCA was founded by Jo Horgan back in 1997 and started with just one Mecca Cosmetica store on Toorak Road in South Yarra.

Fast forward 20 years, Jo and her husband Pete now run a business with 90 stores across Australia and New Zealand, comprising of four store concepts, Mecca Cosmetica, Mecca Maxima and MECCA. There are plans to open a further 10 by Christmas.