Eight years after getting out of the cosmetics business, Sears is jumping back in, banking that the high-margin sector can give the retailer a much-needed profit boost.
The flagship brand of Sears Holdings Corp. is opening full-service beauty counters at 13 stores in Los Angeles, Chicago and New York this week.
The goal is to roll out the beauty business to 100 locations next year and, if all goes well, expand to as many as 400 of its 852 Sears department stores by 2012, said Andrea Goldner, Sears' merchandise manager for cosmetics.
"There is absolutely an opportunity for beauty products at Sears," Goldner said. "The time is right to get back into that business."
The pilot is the latest in a wave of concepts Sears has been testing, such as a drive-through general store and a free-standing appliance shop.
Beauty products, including fragrances and skin-care products, are widely considered more resistant to recession than other categories and indeed are selling better than discretionary items such as apparel, said Karen Grant, vice president and global beauty industry analyst at NPD Group, a market research firm in Port Washington, N.Y.
"Of the industries to get into, it seems to be a bit more stable," Grant said. "It could be a good venture for [Sears] if they could execute it -- which they've had trouble with in the past."
Sears eliminated the beauty business in 2001 under former Chairman and Chief Executive Alan Lacy as part of a broader effort to peel away poorly performing businesses. The exit was less than graceful, coming just weeks before the company was set to launch a partnership with Avon Products Inc. inside scores of stores.
Sears has been in and out of the beauty business for decades. The company got out of cosmetics in the mid-1980s, only to return with its own brand, Circle of Beauty, in 1995.
This time, Sears is carrying nationally recognized and specialty brands, including CoverGirl, L'Oreal, Maybelline and Burt's Bees. Sears also will be the exclusive U.S. retailer for French firm Yves Rocher's botanical products.
Sears will try to differentiate its beauty business by mixing mass-market prices and displays with department-store service in a mall, Goldner said.