Birchbox to give Walgreens a beauty facelift
Birchbox announced Thursday that it will launch sales at 11 Walgreens stores later this year and early next. The dedicated Birchbox spaces will run apart from Walgreens typical beauty aisle, with "elevated design" and fairly large areas ranging between 400 and 1000 square feet.
Six of the new stores — in New York City, Chicago, Los Angeles and Minneapolis — will open on Dec. 6. Five more — in Chicago, Dallas, Los Angeles and Miami — will launch early next year, according to a press release emailed to Retail Dive.
The partnership also entails Walgreens taking a minority equity interest in Birchbox, according to the release.
After venturing into online beauty sales at a time when the category was a rarity on the web, Birchbox has struggled to grow.
The e-retailer worked to expand beyond subscription boxes of trial items and struggled to reach profitability, though it said it notched that milestone last year.
The company, however, has had a hard time getting beyond customer acquisition mode. Last year, after struggling to raise more funding, Birchbox pulled back plans for growth and underwent several rounds of layoffs. At various times in recent years the company was said to be on the market, and the likes of Walmart and QVC were rumored to be suitors. In May, Birchbox sold a majority stake to one of its investors, hedge fund Viking Global Investors.
Since its launch in 2010, Birchbox has raised nearly $90 million from investors and was once valued at nearly $500 million. The beauty brand has since expanded to six countries, with two permanent brick-and-mortar stores in New York City and Paris. The company has said it has more than 2.5 million active customers and partners with 800 brands, and that last year was a "record-breaking year for subscriber acquisition."
Birchbox this summer revamped its website to improve discovery. If the pilot with Walgreens goes well, the big-box chain may finally give Birchbox the scale it's worked to achieve.
"In Walgreens, we have found an exciting partner that supports our mission of reaching an underserved customer who doesn’t prioritize beauty," Birchbox CEO and Co-founder Katia Beauchamp said in a statement. "Birchbox has effectively changed the relationship that this customer, who represents 70% of the market, has with beauty and increased her spend in the category."
It's good for Walgreens, too. The drugstore retailer and rivals alike have ceded beauty sales to specialty retailers like Sephora, as well as Ulta, which sells many of the same mid-brands. The Birchbox spaces will bring "more than 40 prestige brands" into stores along with associates trained by Birchbox, and a curated Birchbox shop will be featured on Walgreens' websites. Birchbox will also offer the “Build Your Own Birchbox” experience featured at its flagship stores in New York City and Paris, the companies said.
Follow Daphne Howland on Twitter