Can a Department Store Build Its Own Beauty Brand? Liberty Bets Yes.

Liberty London is coming for your makeup bag.

On October 18, the department store is launching a line of five high-end fragrances under the brand name LBTY, each inspired by a different print from the extensive fabric print archive the company is so well-known for. The 100ml scents will debut in Liberty’s London flagship and website, priced at £225, or just over $285.

The fragrance is only the beginning of the company’s beauty ambitions: there are plans to build out a full beauty offering spanning other categories, said Laura Simpson, who joined the company earlier this year as managing director of the LBTY brand. (Simpson herself has years of beauty experience, holding executive positions at Coty, Wella, and P&G).

“We see it as a global brand in its own right,” said Sarah Coonan, the department store’s managing director. “The dream is that this can stand sort of individually as a brand outside of the department store model. That’s how we’ve approached this.”

Building out a beauty offering is part of a broader strategy at Liberty as it finds new avenues of growth beyond its one physical store in central London. The company has had success branching out into new categories like bags and swimwear, leveraging its signature prints and Tana Lawn cotton fabric to great effect; brands from Gucci to Nike to LoveShackFancy have collaborated with Liberty to use their fabrics and prints on signature products.

Beauty is a different beast — and a space where Liberty has no product development expertise. Yet the department store does boast a sizeable beauty retail business with a distinct, loyal customer base. It’s also an established brand in its own right, enjoying a global recognition that reaches far beyond the four walls of the Regents Street flagship. This, Coonan and Simpson say, provides a springboard for success in a crowded and competitive category.

“In this context, we don’t think of ourselves as a department store that is launching a fragrance. It’s very much driven through our ‘Liberty as a brand’ lens,” said Coonan. “Our print is our superpower … It’s got such a broad appeal and such charm that we feel excited about the potential for us as a fragrance brand.”

Building a Beauty Authority

As a department store, Liberty sells everything from clothes and shoes to stationary and homewares, but beauty is its most significant category, accounting for just under 40 percent of total retail sales annually, said Coonan. Last year, sales at the department store surpassed £116 million, up 42 percent year on year, according to public filings.

Fragrance, in particular, is the “heart and soul” of its beauty department, driving a majority of beauty sales, she added. The store is well-known for its curation of must-have, under-the-radar names, establishing an authority in the space within the local market. Liberty launched many now-buzzy niche fragrance names in the UK, including Byredo, Frederic Malle, D.S. & Durga, and Le Labo.

It also helps that sales of high-end fragrances have surged in recent years. Across North America and Europe’s top five beauty markets, high-end perfumes costing over $150 generated $2 billion in sales for the year ending June 2023, growing 56 percent year-on-year — five times faster than the total prestige fragrance space — according to market research firm Circana.

The segment’s pacey growth is piquing investor interest: last year, Puig purchased Byredo; then Kering snapped up Creed for $3.8 billion in June, and Advent International acquired a majority stake in Sprecher Berrier Group of Companies, the owner of niche fragrance labels Parfums de Marly and Initio Parfums Privés. Young lines like Henry Rose, Vyrao and Juliette Has A Gun have also all recently raised capital.

LBTY fragrances are intended to sit comfortably alongside the more artisanal names driving the market right now, said Simpson. Scents have been developed by the likes of Frank Voelkl, the nose behind Le Labo’s Santal 33, and Pierre Negrin, who created Tom Ford’s Black Orchid and White Patchouli perfumes. As more niche fragrance names find greater scale, there’s room for LBTY to offer shoppers something differentiated, said Simpson.

“There’s a different shopper that doesn’t want to just wear the same scent that somebody else walking down the street next to them is wearing; they want something a bit more unique,” she said. “That’s exactly the Liberty shopper.”

There’s a different shopper that doesn’t want to just wear the same scent that somebody else walking down the street next to them is wearing…That’s exactly the Liberty shopper.

For now, the new LBTY fragrances will only be available to purchase in the Liberty store and on its website. However, after building credibility in the category, the team hopes to broaden out distribution by partnering with key luxury retailers in global markets, said Simpson.

Liberty has already seen an appetite from shoppers for scented products bearing the store’s name. During the pandemic, it debuted a collection of candles to capitalize on surging demand for home fragrances. The launch surpassed expectations, said Coonan, with the retailer selling twice as many candles as expected in the first year. Today, Hera Candle is the top-seller in the whole candle category.

Going Beyond Fragrance

Off of the success of its home fragrances, the perfume seems to be a safe bet for Liberty, but a move into categories like skincare and makeup — competitive segments where product efficacy is critical — could be more challenging. Success would depend on “how they develop it and what their point of difference is, how they position it and what expertise they put behind that as well,” said Wizz Selvey, a brand and retail strategy consultant.

Barneys New York, for example, relaunched as a skincare brand last year, even though the former department store was better known for its authority in fashion. The line was made by Authentic Brands Group, who owns Barneys’ intellectual property, in a licensing deal with South Korea-based Gloent Group, and was seen by many as having very little to do with the thoughtful approach to curation and merchandising the store was originally known for.

Yet, when done right, own labels can be advantageous to retailers. They can provide a point of difference to competitors, which often all stock many of the same brands. Plus, thanks to higher margins on products produced in-house, owned brands can be highly profitable.

French beauty chain Oh My Cream, which has established itself as a destination for “clean” skincare, successfully sells its range of “skincare essentials” alongside higher-priced products from Tata Harper and Susanne Kaufmann. Sephora leverages the expertise of parent LVMH to create its Sephora Collection range.

Liberty already stocks coveted skincare names like Biologique Recherche and Augustinus Bader and sought-after makeup labels like Jones Road and Westman Atelier. A broader LBTY beauty offering would be designed to complement, rather than compete with, these brands, said Coonan.

“Outside of our brand, beauty is still a really important business for us, and we want to continue to grow and develop that business as a whole — and stay different and one step ahead of competitors,” Coonan said. “The best way to do that is to have a product that is inherently Liberty.”

Selvey says many of the ingredients for LBTY’s success in beauty are there.

“[Liberty has] got that brand equity and that aspiration … They’re an authority in beauty, in terms of trends, innovation, and launching new independent brands; they’re very good at curation as well,” said Selvey. “That provides an opportunity.”