Recently many department stores that carry the makeup brand Estée Lauder have been struggling. The biggest department store sales contributor is Macy’s. Macy’s announced that by early 2017 over 100 stores would be closed. The department store has been feeling the brunt of how popular online shopping has become. A main contributor to Macy’s closings is Amazon.
According to wsj.com, about 30% of global sales of Estée Lauder are accounted for at department stores. The conclusion can be made that without the department stores Estée Lauder might make significantly less money. However, the famous makeup brand also makes Clinique and Mac cosmetics. On Friday the company predicted a lower than expected profit for the upcoming year. Estée Lauder also expects sales to decline somewhat in the months to come.
Shares on Estée Lauder did fall on Friday. Some sales analysts believe that Estée Lauder could really boost their sales at less expensive outlets. One of the main ideas is to be sold at the makeup store Ulta. The Chief Executive Fabrizio Freda of Estée Lauder did agree that the company was going to have to branch out. Yet this does not mean specifically less expensive stores.
Many cosmetic companies rely on department stores for a good percentage of sales. Specialty makeup stores are on the rise. Though their sales contributions also make up a portion of sales. Yet department stores continually contribute to sales, therefore, making them important in the industry. Not all sales can be held at specialty makeup stores.
Online shopping is also not surprisingly on the rise. Though the sales online make up a relatively small portion of sales. This might be attributed to the fact that one cannot swatch a palette or test a fragrance. The shopping experience online is not as inclusive or reliable for some shoppers. Though this is not to say there is not growth in the online makeup industry.
Multiple other high-end brands are feeling the brunt of the growth of online shopping. The makeup industry is not the only one affected. Many people are simply finding it more convenient and maybe even cheaper to shop online. In multiple companies like Marc Jacobs sales have also declined. The outlook appears to be unclear for these companies as online shopping becomes more popular.
Though it has been challenging, Wall Street Journal did report a small increase in revenue for Estée Lauder. Though the company also experienced a significant loss in earnings. Obviously, Estée Lauder is going to have to come up with some new products and sales tactics. This would help to keep the company afloat for years to come. Yet at the moment the company is not extremely worried about going out of business.
One thing that consumers might like to see is a halt to animal testing. The thing with this is that Estée Lauder is for the elimination of animal testing. On elcompanies.com it describes how the company would like to promote alternative methods of testing. However, Estée Lauder sells around the world. This means that many countries still require cosmetics to be tested on animals by law.
Estée Lauder is trying to encourage other countries to adopt methods other than animal testing. Though Estée Lauder does still sell to multiple countries that do require it. However, the company is involved in multiple groups like the European Partnership for Alternatives to Animal Testing (EPAA). Therefore Estée Lauder is trying to do something, yet many might think it is not quite enough. Yet perhaps with the drop in sales Estée Lauder might consider doing more to promote it’s public image.