E-commerce powerhouse Adore Beauty plans to open two retail concept stores in its home state of Victoria this financial year, in a move it says will bolster brand awareness and new customer acquisition. The former Smart50 finalist has signed two leases for the stores, which will be located at the Southland and Watergardens shopping centres and are expected to open in early 2025. The details about the new stores were included in the company’s investor presentation accompanying its 2023-24 full-year results, released on Monday.
The stores will both have a store footprint of between 150-160 square metres, are due to open in the second half of the 2025 financial year, and are “expected to be profitable”, according to the document. SmartCompany reported in February that the online retailer was working with design agency AKQA to “explore how the Adore Beauty brand can be brought to life in a physical format”. The company, which was founded by Kate Morris and James Height and listed on the Australian Securities Exchange in October 2020, did not specifically mention bricks-and-mortar retail stores at the time.
But it appeared Adore Beauty was considering what a physical retail store could look like from a brand awareness perspective, while also working on in-person brand activations and events to drive customer awareness, loyalty and sales. Both shopping centres are already home to major beauty retailer Mecca, while the Southland centre also counts Sephora among its tenants. Adore Beauty to ‘leverage’ AI Adore Beauty also revealed in its investor presentation that it plans to continue leveraging artificial intelligence to optimise its operations.
The retailer recently launched its own AI chatbot, ABi, to respond to customer enquiries, and SmartCompany has asked if and how the retailer plans to expand the usage of the tech. It comes as the company reported higher revenue, and profit, in the 2023-24 financial year. Full-year revenue came in at $195.
72 million, which represented a 7% increase on the previous corresponding period, while net profit increased by 489% to $2.18 million. The retailer reported earnings of $4.
8 million, an increase of 661%, and a margin of 2.5%, which was in line with guidance. Meanwhile, sales for the first seven weeks of the 2-24-25 financial year are up 7%.
Adore Beauty increased its returning customers by 5.8%, to 519,000 customers, while active customers increased by 1.6%, to 814,000.
Tamalin Morton, who is set to depart as CEO of the company at the end of September, said Adore Beauty’s “customer-centric strategy” is paying off, with customer retention increasing by 8.5% last financial year, to 64.7%.
“Investment in brand and above-the-line marketing is strongly driving awareness of Adore Beauty, achieving a record 71% in our target audience — up from 62% last year,” Morton added in a statement to the market. “We are also continuing to expand our product range — now with over 300 brands — to ensure we have a compelling beauty and wellness proposition for our customers.” The debt-free company added 23 products to its private label portfolio last financial year, and now has 61 products across its Adore Beauty, AB LAB and Vivology brands.
One of the new additions is the organic skincare brand iKOU, which Adore Beauty acquired in July in a $25 million all-cash deal . The brand operates three retail stores in New South Wales — in Sydney QVB, Byron Bay, and Leura in the Blue Mountains — and Adore Beauty has indicated it plans to expand this retail network into Victoria and Queensland in the 2026 financial year. Adore Beauty also plans to feature iKOU in its own retail stores and has indicated it may trial iKOU services in treatment rooms inside the Adore Beauty stores.
Experienced retail executive Sacha Laing will take over as CEO of Adore Beauty on October 1. SmartCompany has contacted Adore Beauty for further comments. Entries for the 2024 Smart50 Awards are now open.
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