Sephora Is Opening Shops In Iran
$LVMUY, $OIL
France’s Sephora plans to open several shops in Iran beginning in Y 2016, thus becoming 1 of the 1st major European specialist cosmetics retailers to directly invest in the country as it emerges from years of economic sanctions.
Sephora, part of luxury industry leader LVMH (OYCMKT:LVMUY), running 2,000 outlets worldwide, is keen to build its presence in Iran where there is a huge appetite for cosmetics and make-up.
With a population of nearly 80-M, Iran is the Middle East’s 2nd biggest market for beauty products after Saudi Arabia with annual sales reaching more than $3.8-B in Y 2014, according to the data.
And the beauty and personal care market is expected to nearly treble in the next 5 years to more than EUR 10-B, Euromonitor forecasts.
Sephora is currently finalizing talks with its partner in Iran.
LVMH and Sephora declined to comment.
While Western beauty products have long been sold in Iran in various perfume shops, the July accord is expected to bring an economic boom to the country which has been suffering from years of under-investment.
“We estimate that women, whatever their revenue level, spend as much as a 33% of their income on beauty,” Reza Miremadi, who distributes L’Oreal’s mass market brands such as Maybelline and Garnier in Iran.
Several managers from LVMH have made trips to Iran in September and October and executives from Dior, Louis Vuitton and Bulgari are preparing to go there next month to examine investment opportunities, the sources said.
And the French trade group Comité Colbert, which represents 80 luxury brands, said it was planning to organize a trip in the Spring.
Iran, once dominated by bazaars and tiny shops, has seen an explosion in shopping malls in recent years.
I believe luxury brands are going to be very successful in Iran.
Iran, whose economy is largely dependent on Crude Oil and nat Gas revenues, has more than 3-M high net worth individuals who are major and regular buyers of luxury goods, analysts estimate.
Key political milestones will be Iran’s legislative elections in February and the outcome of the US presidential campaign in November as there is concern president Barack Hussein Obama’s successor could re-impose sanctions.
Also, as part of the July Vienna nuclear accord, there is a “snap back” provision which would re-instate the sanctions if Iran fails to fulfill its commitments.
Have a terrific weekend.
Paul Ebeling
HeffX-LTN
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