Cosmetics retailer Adore Beauty rolls out new stores in national expansion push

Online cosmetics retailer Adore Beauty will open two new stores in the coming weeks, putting it well on its way to having 20 locations nationally by 2026 as it ramps up its bricks-and-mortar presence.

The two stores in Perth’s Westfield Carousel and Booragoon — opening on Thursday and July 10, respectively — mark Adore’s first venture outside its home State of Victoria, where it opened two shopfronts in Southland and Watergardens earlier this year.

Adore chief executive Sacha Laing said WA was its fastest growing market in terms of sales.

“WA was a focus for us, particularly given the speed of the growth in that market,” Mr Laing told The Nightly when asked why Perth beat Sydney. Adore opens its first Sydney store in August.

The ASX-listed retailer launched as online-only in 2000 and last November first unveiled plans to open more than 25 stores in the next three years.

Mr Laing said it was on track to have 20 stores nationally by the end of 2026 after penning deals with “several of the country’s largest landlords”.

He is confident about Adore’s push into bricks-and-mortar despite social media platforms, like TikTok, becoming an increasingly popular storefront, especially for young consumers.

“In Australia, only 13 per cent of retail sales in the beauty category are done online, so 87 per cent of retail sales in the beauty category are done in physical stores,” Mr Laing said.

“When we look at the opportunity to grow the Adore network . . . there’s this huge market that we haven’t previously addressed.”

Adore’s physical stores are set to challenge major industry players Mecca — which holds the biggest market share in cosmetics in Australia at about 21 per cent — and Sephora, the beauty chain owned by French luxury goods giant LVMH.

According to IBISWorld, Australia’s $6 billion cosmetics industry is forecast to grow 2.5 per cent over the next five years.

Mr Laing reckons the market is “big enough for us all”.

“Our product mix and our category mix are quite different. When we think about the competitive set or the overall landscape, there’s department stores, there’s the value offerings of some of the other mass market beauty retailers, and there’s specialty beauty retailers . . . but the market is quite fragmented and what that enables us to do is find our own space,” he said.

Adore — founded by Kate Morris — reported revenue of $195.7 million in the 2024 financial year, with net profit hitting $2.2m.

That compared with a loss of $559,000 the prior year.

Meanwhile, Mecca’s latest accounts released earlier this month revealed it had raked in just over $1.2b in revenue in the year to the end of December 2023, up from the $971.5m recorded the previous year.

Adore has had a troubled life on the Australian Securities Exchange, with its share price tumbling since listing in October 2020 from $6.91 to 64¢ on Tuesday.

Asked if he watched the share price, Mr Laing said “absolutely”.

“My job is to create shareholder value and to attract new investment interest in the business as well,” he said.

“Acquiring new customers through our online channels and through our physical stores, improving the frequency of new customers and growing the overall revenue line of the business, will inevitably create great profit growth.

“Growing profitability, fundamentally, is what will drive the share price.”

Mr Laing took on the top job at Adore last September, replacing Tamalin Morton.

He has more than 25 years of experience in the retail industry, having held executive roles at David Jones and Country Road Group.

He also led youth fashion retailer General Pants Co and accessory brand Colette by Colette Hayman, which was saved from administration early last year.

The reporter travelled to Melbourne as a guest of Adore Beauty.