The Real Cost Of Sephora’s Store Closing Diversity Fix

CBx Vibe: I’m Upset” Drake

By CultureBanx Team

  • Sephora is closing 400 stores for diversity training, after SZA called them out
  • African Americans spent $54 million in the enthnic hair & beauty market in 2017

European conglomerate Moët Hennessy Louis Vuitton (LVMUY -0.87%) is closing its U.S. Sephora stores on June 5th for diversity training, after singer SZA called them out for being racially profiled. The beauty products juggernaut will shut down more than 400 stores to tackle diversity during a 1-hour session. What’s the real cost of attempting to fix diversity in such a short amount of time for Sephora?


Why This Matters: In recent years, Sephora has started partnering with more minority-owned makeup brands, such as Pat McGrath Labs, Fenty Beauty and Huda Beauty. Not to mention, SZA even starred in one of Rihanna’s Fenty Beauty lipstick campaigns, and only adds insult to injury as the visibility of these brands has transformed the beauty community by demanding diversity and inclusion to stay relevant. African Americans have cornered the ethnic hair and beauty market, ringing up $54 million of the $63 million spent in 2017. Diverse representation contributes to the success of Sephora, one of the main growth engines of LVMH’s selective retailing group that generated 28% of the group’s sales in 2018.

Rihanna and LVMH have shared immense success with her Fenty beauty line, it generated $558 million in its first full year in operation

Diversity and dollars go hand in hand for Sephora, especially since Rihanna and LVMH have shared immense success with her Fenty beauty line. It generated $558 million in its first full year in operation. The $445 billion beauty industry is a gold mine with companies like LVMH constantly mining new ways to get a larger share of the market, with the industry expanding at 3% a year. If they don’t get this diversity training right it could be very costly to them.

Situational Awareness: Sephora isn’t the only company that tried out a short diversity training. Starbucks (SBUX -0.14%) did as well nearly a year ago and Bloomberg estimated the cost of lost sales due to the one-day training event was $16.7 million. However, for a company that’s worth $78 billion this is a small drop in the bucket.

CBx Vibe: I’m Upset” Drake


CultureBanx Team

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