A major American cosmetics brand has decided to shut down all its UK physical stores. This marks a significant shift in the company’s business strategy.
The brand has now pivoted its focus towards strengthening its wholesale and online presence. This move affects numerous employees and changes where consumers can purchase their products.
Closing of UK Stores
The US beauty brand has closed its seven UK brick-and-mortar stores, including those in Birmingham, Nottingham, Manchester, Liverpool, Newcastle, Cardiff and Stratford. This decision affects 73 employees who have been made redundant. The move is a part of the company’s significant shift towards wholesale and e-commerce operations.
Customers can still find the brand’s products at counters in major retailers like Boots, Selfridges, Flannels, and H Beauty, as well as online. The company states this change aims to prioritise and expand its successful wholesale and e-commerce operations, similar to its model in the US.
Statement from the Parent Company
A spokesperson from the parent company, Forma Brands, explained the reasons behind this move. They mentioned that despite the stores in Europe providing an extraordinary experience for customers, they faced disproportionately high store rent obligations. This financial strain made the decision to close these stores unavoidable.
The spokesperson further said, “We have made significant progress over the last year positioning our business for growth by focusing on our flagship brand largely through our wholesale and e-commerce operations.”
Support for Affected Employees
The immediate redundancies highlight the sudden nature of this decision, leaving many employees seeking new opportunities. However, the company’s efforts to provide enhanced redundancy packages offer some relief during this transition period.
Future Business Strategy
This strategic shift aligns with Forma Brands’ overarching plan to focus on its flagship brand through more profitable channels. By eliminating high-rent physical locations, the company aims to streamline operations and maximise profitability.
The company has facilitated an ownership transition for its UK wholesale and e-commerce businesses, which will now operate as FORMA BRANDS UK LTD., effective immediately. This change is expected to ensure a more focused and efficient business strategy moving forward.
Market Impact
While the closure of physical stores might come as a disappointment for loyal customers who prefer in-store shopping, the move could potentially lead to better product availability and pricing online and through wholesale channels. This change reflects a broader trend in the retail industry towards digital and wholesale markets.
Retail experts indicate that such strategic decisions are becoming increasingly common as brands look to adapt to changing consumer behaviours. Online shopping and wholesale partnerships offer brands greater flexibility and reach.
The closure of the beauty brand’s UK stores is a significant move towards modernising and streamlining its operations. This strategic pivot reflects broader retail trends.
While the immediate impact on employees and customers is substantial, the long-term benefits for the company’s growth strategy could be promising. The brand’s focus on wholesale and e-commerce is set to define its future operations.