e.l.f. plans UK store debut with Superdrug, but shares fall

By

Sandra Halliday

Published
May 11, 2017

North American affordable cosmetics specialist e.l.f. Beauty is to launch in UK physical stores in a deal with major local chain Superdrug.

The move comes as make-up continues to be the top-performing category in UK health and beauty (according to IRI) with a value of £893m in the year to mid-March, £55m higher than a year earlier and £100m higher than the year before that.

e.l.f (which stands for eyes, lips, face) has previously focused on the US, Canada and Mexico. It will mark its European debut with the UK launch and sees the move as a springboard for its wider ambitions in mainland Europe.

The company is already available online to UK consumers who, like those in many other markets, are enthusiastically buying into the make-up boom that’s been driven by social media and the selfie obsession. The brand is particularly strong in on-trend categories such as facial contouring, lip colour and brow products.

The proliferation of beauty brands across the price sector is seeing major two-way traffic between the US and Europe as companies large and small see the potential for fast growth. In fact, e.l.f.'s news came on the same day that UK-based affordable cosmetics firm Warpaint London said that its US business is growing fast and that expansion there would be one of its focuses this year.

Meanwhile e.l.f. said during its conference call after releasing its latest results that it is looking for further retail partners and that it will continue to build pre-launch demand in Europe via its ongoing e-tail and social media activity.

The company had earlier reported Q1 sales up 15% and net profit surging 40%. It also said on the call that it will expand its US presence with more space in Target and a launch in Ulta Beauty.

But it seems not everyone was impressed, with the firm’s shares sliding over 9% on Thursday, the day after the results came out. The slide came after the shares had risen by roughly the same amount in the past three months, beating the overall S&P 500 index.