Following its bankruptcy in 2020, the beauty brand Sabon turns to omnichannel
Israeli prestige beauty brand Sabon is pressing the reset button after its bankruptcy in 2020, starting with an expansion into Ulta Beauty through 474 doors.
The partnership with Ulta Beauty marks the first time Sabon has sold its products outside of its own e-commerce site and standalone stores since entering the US market in 2003. The 25-year-old brand has 200 global standalone stores in 15 countries, including 70 in Japan. Sabon, perhaps best known for its Dead Sea salt body scrubs, as well as body lotions, shower gels and home fragrances, has been one of many victims of Covid-19 store closures. 19. It filed for Chapter 11 bankruptcy in May 2020, at the height of the pandemic. In his holding company’s filing, Sabon listed debts of between $10 million and $50 million and assets of less than $500,000. Ulta Beauty isn’t the only part of Sabon’s comeback strategy; in September, Sabon also reformed its DTC e-commerce site to use Shopify and expanded distribution to Amazon.
“The US territory is so vast that resuming a physical presence in the US will take time, and our goal is to establish balanced omnichannel distribution,” said Sébastien Guinchard, CEO of Sabon USA. “Ulta Beauty is the perfect match with over 1,300 doors, and they’ve managed to create a community of beauty enthusiasts.”
Since 2020, Sabon has doubled its e-commerce sales to 70% of brand revenue, with the biggest growth coming from outside of New York, Guinchard said. About 50% of e-commerce sales now come from outside metropolitan cities. Guinchard said Sabon is positioning itself well as a gift brand, which is an important source of how people learn about the brand. Additionally, Sabon shifted its advertising to digital first from 2019 and has doubled its investments since then.
The brand used an undisclosed US distribution partner from 2003 to 2017, when it expanded its physical footprint to around 15 stores. In 2017, Groupe Rocher acquired a 66% stake in Sabon for $129 million and the remaining 33% in 2018 for approximately $46 million. Between 2019 and 2022, Sabon closed several stores, including five as part of its Chapter 11 restructuring. It currently operates four stores in New York City, including three in Manhattan. Sabon emerged from bankruptcy in the summer of 2021. He plans to grow his income in double digits over the next 5-7 years.
“Chapter 11 was an opportunity to downsize to an acceptable number of gates,” Guinchard said. “That’s why we’re launching so many initiatives right now. It was a key moment to pivot and relaunch the brand in the United States”
Sabon’s retail stores were notable for encouraging customers to try its hand soaps, body scrubs, and lotions in large stone sinks that could accommodate multiple people. Within Ulta Beauty, Sabon products are located in the bath and body section. Sabon has three feet of storage space housing her shower oil, body scrubs, and body lotions. A travel-sized discovery trio box is also on sale. The body lotions are open for in-store testing, and Sabon plans to distribute more than 100,000 sachets of the three products to Ulta Beauty customers over the next 12 months. Sampling is a big part of Sabon’s current customer acquisition strategy, as she produced 100,000 samples for Allure’s September beauty box. Ulta Beauty declined to comment.
Although Sabon has moved away from its own retail stores, opening additional locations is not out of the question. Guinchard said that over the next 7 to 10 years, the brand could potentially open stores in Florida, Illinois, Texas and California.
“A long-term adjustment had to take place. Specialty retailers take [up] more space [in the beauty shopping experience] and are now a one-stop-shop,” Guinchard said. “[But our own stores] are going to be a key tool in recruiting new customers to fuel and nurture the double-digit growth we have in mind for the years to come.