Survival of the fittest—retail Darwinism has begun. Struggling department store chain Debenhams, which is in administration, announced it would not reopen the five stores leased from Hammerson after failing to agree on rent terms. British fashion retailer Next swooped in, negotiating a deal to transform the beauty departments into its own beauty hall concept, expanding its online beauty business into brick-and-mortar retail.
The UK beauty market was $27 billion in 2018 and forecast to grow nearly 17% over the five years leading up to 2023, according to researcher GlobalData, and Next wants to grow its piece. The high street retailer entered the beauty category in 2018 selling 100 beauty brands through an online collaboration with Fabled by Marie Claire. In June of 2019, Next acquired the business from Ocado in a deal that will be worth about £8MM.
Next will brand the space “The Beauty Hall from NEXT,” creating a premium retail environment to complement its existing online beauty business that currently sells over 200 brands, including Estée Lauder, Clinique, Benefit, Origins, and Elemis.
Simon Wolfson, Next’s chief executive, said in a statement: “This is an exciting opportunity to work with existing and new beauty brand partners to create a new force in beauty retailing—bringing our online business to life through premium store environments in some of the UK’s most important retail locations.”
Next said it had signed new flexible leases with Hammerson for space in the flagship sites at Bullring & Grand Central in Birmingham, The Oracle in Reading, Highcross in Leicester, Silverburn in Glasgow, and Centrale in Croydon. The retailer also said it is in discussions for a “small number” of further sites, as it continues to grow its beauty business.
Next said it is working with its retail teams and brand partners to ensure its stores adhere to government social distancing guidelines and are safe for customers and staff when they open. It also plans to hire staff with beauty retail experience and “likely” to offer positions to former Debenhams staff.
David Atkins, Hammerson’s chief executive, said in a statement: “This is a really challenging time for all of us, so it’s really encouraging to see strong, innovative brands like Next work with us to plan for the future.”
“This is another example of how we are re-purposing department store space and improving the shopping experience for consumers,” he continued. “The Beauty Hall from Next is a great concept and it’s a real vote of confidence in our flagship destinations that Next has chosen these locations to launch its new offer.”
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