​Forever 21 Said to be Considering Freestanding Beauty Boutiques

The beauty retail world may be about to welcome another new entrant: fast-fashion player Forever 21.

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The Los Angeles-based company is getting set to open freestanding beauty boutiques, according to market sources. One source said the stores will be called Riley Rose, and that the retailer may open about 10 locations before the holiday season. The concept has been described as very experiential, Millennial-focused and Instagram-friendly, said the source, adding that if the initial response goes well, Forever 21 might consider opening another 10 stores by March 2018.

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Another source said nine stores are being contemplated and suggested the boutiques would have offerings to compete with Sephora USA Inc. and Ulta Beauty. Forever 21 did not respond to a request for comment Thursday.

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The retailer offers a range of beauty products including makeup, skin care, hair care, nails, tools and K-Beauty (including sheet masks). Forever 21 has its own private-label line, and also sells products from brands like E.l.f. Beauty and NYX.

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Retail investment analyst Jane Hali of Jane Hali & Associates said beauty is a category where fast-fashion retailers frequently play, noting that H&M has tested the idea of freestanding beauty concepts before with its East London beauty pop-up.

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Many new retail concepts opening up are trying to capitalize on the popularity of the category, Hali noted. “They’re going after the boutique beauty customer, which is thriving,” Hali said. “Ulta Beauty is boutique, Sephora is boutique — where you have service and the salespeople sell many brands. The customer doesn’t want to be only sold at Estée Lauder — they want the best in mascara with the best in eyeliner, and the salespeople will introduce them to brands they might not have heard of.

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“I see it as a growth opportunity,” Hali added.

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Retail analyst Neil Saunders of Global Data Retail said a fast-fashion player might look to open a freestanding beauty concept in order to diversify.

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“The slight drawback is that the beauty market has become [more saturated] because everyone’s spilling into it,” Saunders noted. “You’ve got to really differentiate, and you’ve got to provide consumers with a reason to go into whatever offering you’ve created… that can be a bit of a challenge.”

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He noted it is more common for apparel retailers to bring beauty into existing doors. “It is unusual to do something stand-alone,” Saunders said. “[Apparel retailers] put beauty in existing stores, but almost to drive footfall and traffic into those stores as well.”

“For Forever 21, it has a reputation for younger fashion and fast trends and has sold beauty in store before,” said Wendy Liebmann, chief executive officer of WSL Strategic Research. “That’s a logical leap into affordable, fashionable, fast beauty for younger shoppers.”

Forever 21 isn’t the first retailer said to be amping up its beauty offerings — sources indicated in March that Anthropologie has also mulled the idea of stand-alone beauty stores. Anthropologie’s parent chain Urban Outfitters Inc. stocks a trendy, curated selection of beauty products.

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Beauty chains themselves are expanding, too. Ulta Beauty has a plan to add 100 stores a year for the next several years; BlueMercury’s Barry Beck recently said the Macy’s Inc.-owned chain has room for another 300 or so doors, and Aspen, Colo.-based Cos Bar is planning to add more than 30 locations. These store openings are in addition to further expansion by Sephora, as well as increasing pushes by drugstore chains such as CVS, Walgreens and Duane Reade into beauty and wellness, not to mention the plethora of stand-alone concepts being unveiled, from DryBar to Skin Laundry.

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All these retailers are aiming to capitalize on the continuing growth of beauty and beauty services, particularly in the increasingly important Millennial market.

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For Forever 21, meanwhile, Riley Rose would simply mark its latest expansion move. These have included the relaunch of its plus-size collection, which took place in April, and the expansion of its F21 Red lower-priced offering.

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