Cosmetics retailer Sephora cuts jobs in China as market collapses

LVMH-owned cosmetics retailer Sephora is cutting its workforce in China, the company said on Wednesday, as consumers in the world's second-largest economy are spending less on creams and makeup.

Sephora mainly sells high-quality, so-called prestige perfumes and make-up and currently employs around 4,000 people in the country, which has been one of the fastest-growing cosmetics markets in the world in recent years.
But high unemployment and the collapse of the real estate market have shaken consumer confidence and all leading cosmetics companies have warned in recent weeks of significant impacts on their sales in China.

Less than three percent of the workforce will be affected by the measure, a company spokesman said. That corresponds to fewer than 120 jobs.

“In response to the challenging market environment and to ensure our future growth in China, Sephora China is currently streamlining our organizational structure at our headquarters to ensure we have the right capabilities for long-term, sustainable growth,” the company said in a statement.

Sephora has around 350 stores in more than 100 cities in China and also sells products online.
Bloomberg had previously reported that the company would cut hundreds of jobs, or about 10% of its workforce in China, both in offices and stores.

The retailer is one of French luxury giant LVMH's fastest-growing businesses in other markets, but it is not doing so well in China, where a large proportion of beauty products are purchased through e-commerce platforms.