Louis Vuitton 2002 Annual Report Download - page 83

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A STRONG OUTLOOK
For 2003, Sephora will continue to expand
its network selectively and improve the quality
of its organization and stores to better serve
customers. Its strategic priorities continue to be
to improve profitability and to concentrate store
openings in the cities and countries where
the Sephora concept offers the greatest potential.
A flagship store will open on the rue de Rivoli
in Paris in the first half of the year.
The growth in net sales on a constant store basis
and the cost-cutting measures implemented
in the United States will pay off over the coming
months. These efforts are designed to obtain
a positive income from operations and cash flow,
as is already the case in Europe, where Sephora
will continue its strategy for profitable growth.
ANNUAL REPORT 2002 • 81
THE NETWORK IM PROVES
ITS PERFORMANCE IN EUROPE
For Sephora Europe, the year 2002 was marked
by the implementation of a plan to improve
operations that contributed to a sharp increase
in income from operations.
With its top priority being the improvement of
its existing network, Sephora limited the num-
ber of its net openings in 2002 to 15 stores
located in the countries with the best prospects
for long-term growth. Sephora opened its first
branded store in Athens. Sephora also opened its
first three stores in Prague in the Czech Repu-
blic. The success of these new stores, in terms
of both sales and profits, confirms the remar-
kable potential of the Sephora concept in Eas-
tern Europe.
THE CONCEPT CONFIRM S ITS SUCCESS
IN THE UNITED STATES
For the second consecutive year, Sephora
performed well above the average for the selec-
tive retailing segment. After the 14% growth in
sales on a constant store basis in 2001, the 25%
increase recorded in 2002 demonstrates the
commercial success of the Sephora concept in a
market where selective retailing recorded only
weak growth. In a move to streamline its
network, Sephora USA closed the Rockefeller
Center store, but strengthened its presence in
Manhattan with new stores and the renovation
of the Times Square store.
Sephora exceeded its targets for improved
income from operations in the United States.
Sales at the sephora.com website rose steadily,
and reported excellent results for the year-end
holiday season. Sephora.com is far and away
the largest American online beauty store.
It continues to expand its consumer base and
the services it offers.