Beauty firm Sephora struggled through another difficult year and may have difficulties trading as a going concern, according to a report in AFR.
The report, which cites Sephora Australia’s accounts filed with ASIC this week, states the makeup retailer’s losses hit $7.87 million in the year to December 2020 – signaling a need for further funding from global parent, LVMH.
LVMH has agreed to increase its support to keep Sephora trading as a going concern, after loaning the business $70 million during the past year, but Sephora’s losses seem to be mounting: with the $7.87 million loss coming after 2019’s loss of $6.5 million.
The physical beauty space has taken a hit throughout the pandemic, with fewer people needing to buy cosmetics while in lockdown and working from home, or turning to proven online providers such as Adore Beauty.
With Christmas coming and face-to-face work back on the cards in many states, however, Sephora’s struggles could ease over the course of the next year.
That’s not to say the business failed to act throughout the pandemic: Sephora commissioned a study aimed at helping the retail industry understand and tackle racism across the industry, and also increased the number of people with disabilities it employs – though this move was also criticised.