Brief

Report: Forever 21 plots beauty buildout with Riley Rose stores

Dive Brief:

  • Forever21 is planning to open at least nine freestanding beauty stores under a new brand, Riley Rose, sometime later this year, Women's Wear Daily reports.

  • The fast-fashion retailer already sells some beauty products including makeup, skin care, hair care, nails, tools and K-Beauty (including sheet masks) from other brands, as well as its own private-label line.

  • The new store concept was described in part as millennial-focused and Instagram-friendly by one of WWD’s sources. After the initial round of stores are opened, Forever21 reportedly will assess their performance and potentially open more locations next year.

Dive Insight:

An apparel retailer finding its way into the beauty segment is not a surprising development at this point. Over the last year, J.C. Penney, Macy'sNordstrom and others have bolstered their beauty offerings with partnerships and private-label rollouts. For those retailers, it has been part of a survival plan to seek out new revenue opportunities that might help save their existing brick-and-mortar locations, which are struggling amid declining foot traffic.

Forever 21 also is trying to stake out some new territory to obtain more revenue, but it isn't trying to bring beauty into its existing in-store mix. It appears to already have done that. Instead, it's trying to leverage that experience into an entirely new brand, a notion that is not new to Forever 21; the company is poised to expand its discount chain F21 RED by 40 stores before the end of 2016.

Why beauty? While consumer spending on apparel is expected to continue to diminish as consumers spend more on healthcare, entertainment, dining out, recreation and electronics, beauty is one of the few consumer product categories with growth potential, according to a recent Morgan Stanley research note. While a category long resistant to e-commerce, beauty has seen a shift in attitudes, driven by demographics and influence via social media, according to a new survey from A.T. Kearney, which found that beauty is discovering accelerating growth online.

It will be interesting to see how these stores look and what is done in terms of design and overall set-up to drive home the experiential concept, a general aim that so many retailers nowadays are pursuing with showrooms and other concept shops. 

It's not yet clear what mix of brands will be offered in the new beauty stores, beyond Forever 21's private-label line. As more apparel retailers have been pressing into the beauty segment, incumbents like Sephora and Ulta Beauty have gotten more creative in partnering with up-and-coming brands like Skin Laundry to broaden their offerings.

Filed Under: Technology Marketing
Top image credit: Forever 21