Can Mecca, Australasia’s top beauty store, go | Australian Markets

When Australian retailer Mecca opens the doorways to its new Melbourne flagship in Might, it should lay declare to being one of the largest bricks-and-mortar magnificence shops within the world. Located in a 150-year-old, terracotta-clad building that was as soon as an outdated ebook arcade at 299 Bourke Avenue, it spans 4,000sq m over three ranges, with a cavernous, 11m-high atrium and mezzanine flooring. Most just lately the premises of Australian retailer David Jones’s menswear division, the positioning has been restored to its interwar glory. Mexican-inspired artwork deco particulars and arched home windows are set towards Le Bon Marché-style scissor escalators.

“We wanted it to have this subliminal theatricality,” says Mecca founder Jo Horgan. At 56 – and a few 28 years after she created the business – she’s nonetheless wide-eyed about Mecca’s prospects. “How do you celebrate artistry? Let’s put a huge beauty carousel in the middle, let’s put in a beauty lab, a Mecca Atelier that does make-up, hair and nails all at the same time, so you are in and out in an hour.” Alongside merchandise, the new store may also have a piercing studio by Maria Tash, an apothecary part aimed toward holistic magnificence, an aesthetic clinic offering full dermal remedies together with lasers and injectables and a “350sq m ode to the spectacular magnificence of fragrance”. Horgan provides: “It’s high-level luxury service.”

The opening is a stake within the ground for Horgan who, since establishing herself as Australasia’s main premium magnificence authority, desires to take her imaginative and prescient international. And she or he is properly on her manner. Mecca served 4.5 million clients up to now 12 months, and has 110 shops throughout Australia and New Zealand, using more than 7,000 people. It sells merchandise from 200-plus manufacturers, round 80 per cent of that are unique. A high-end offering together with La Mer, 111Skin and Augustinus Bader appeals to an older, moneyed demographic, whereas bestselling merchandise from Go-To, Drunk Elephant and Glossier – which Mecca launched to the Australasian market – are aimed toward a youthful shopper. Mecca additionally has its own vary, Mecca Max, launched in 2003, in addition to the Mecca Cosmetica line. Its hero is the To Save Face SPF50+ Superscreen – a pink-tinged cream with a natural end – first launched in 2007 and launched within the UK in 2023, which is persistently the bestselling product throughout the company.

We set out to present control back to the client

Mecca is privately owned by Horgan and her husband Peter Wetenhall, though hypothesis is rife about a potential sale. The company doesn’t reveal gross sales figures, though it says it has grown tenfold up to now eight years. In 2022, a report by IBIS put Mecca’s revenues at close to $1bn (about £500mn), whereas an industry source estimates revenues to be north of £750mn. This determine pales compared to that of its primary competitor, Sephora, the French magnificence behemoth owned by LVMH, which posted double-digit growth in income and revenue in 2024 (the company doesn’t escape actual figures however its selective retailing arm, of which Sephora is an element, posted €18bn in income) and has more than 3,000 shops in 35 nations. In Australia and New Zealand, nonetheless, the place Sephora has 32 branches, Mecca has retained market share. “Mecca is an incredibly successful cosmetic retailer in Australia, with large-format stores that are real destinations and do incredible turnover,” says Craig Woolford, a senior shopper analyst at MST Marquee. “They’ve largely been able to see off the threat from Sephora coming to the Australian market. The go-to cosmetics destination for most people is Mecca.”

In the present day, Horgan is talking from a assembly room within the Nationwide Gallery of Victoria, the place she’s a board member. Her outfit – yellow cardigan, pink and brown swirling shirt and an outsized yellow chain necklace – matches her overwhelmingly sunny disposition. Her make-up as we speak contains Nars tinted moisturiser, Gucci Westman’s highlighter and Chantecaille lipstick, in addition to merchandise from Mecca’s own line, together with eyeshadow and lip liner. Initially from the UK, she moved to Australia along with her household as a teenager, and labored in her 20s as a advertising exec at L’Oréal, the place she admired “the way they layered different divisions to appeal to different consumers”.

Working on the largest magnificence company within the world spurred her to launch Mecca, aiming to disrupt an industry that she says was no longer serving clients. “It was this monopolistic approach where department stores absolutely dominated – they had 80 per cent share in Australia – and these massive global brands owned the retail space, the airwaves… They owned everything.” She provides that, back then, “the customer was 99 per cent female”, however many of the massive corporations had been run by males who didn’t know how to serve that base and as a substitute relied on focus teams. “I felt that there was a more instinctive way to play it.”

Horgan opened the first Mecca store in South Yarra, Melbourne, in 1997, a 65sq m space with a 4m frontage that she now jokingly describes as “retail suicide” as a result of of its small measurement. She had persuaded seven manufacturers to launch along with her, together with NARS, Stila, Urban Decay and Profit, all of which had been new to the Australian market, and whose measurement now owes a great deal to Mecca’s early help. “We set out with a clear vision to give control back to the customer, bring these exciting emerging, niche brands [to market] and provide an environment where the brands are in control of their experience,” she says.

Key to Mecca’s success – which didn’t come simply for the primary 4 years – is buyer loyalty, which Horgan attributes to the model’s distinctive service and schooling. “We have built up a model where we spend four per cent of our turnover on education and ‘engagement of team’, and I think that has honestly been the core engine driver [of the business].”

Provides Woolford: “Mecca’s focus is on having a great store experience and generating a lot of sales, not generating a great profit margin.”

That is reiterated within the Bourke Avenue flagship with its new “MECCAversity” auditorium – an schooling space that may facilitate workers coaching in addition to masterclasses and seminars for patrons to study the whole lot from how to grasp winged eyeliner to flower arranging and financial literacy. “We have such a powerful opportunity to redefine what beauty means to an already engaged consumer,” says Horgan. “I think health and wellness now is such a part of this industry, and we have a broader responsibility to expand our customer’s knowledge about anything and everything.”

A lot of the client hype at Mecca is generated by its loyalty programme Magnificence Loop, which counted 2.9 million members final 12 months. They’re rewarded with a box of samples that arrives 4 occasions a 12 months, the worth of which is set by completely different tiers based mostly on annual spend. Degree One, a “beauty discoverer”, is achieved by spending between $300-$600, whereas Degree 4 is gained by forking out more than $3,500. In line with some clients, there’s additionally a secret Degree 5, known as the “magic circle”, for individuals who spend more than $10,000 a 12 months. “Mecca’s Beauty Loop performs extremely well with consumers due to the high perceived value of rewards and the extent to which they delight shoppers with ‘surprise’ gifts,” says McKinsey & Firm affiliate associate Amanda Winchester. “In turn, this has allowed a natural community to form and create buzz around the programme online.”

It’s such a highly effective alternative to redefine what magnificence means

The reward of Magnificence Loop is an various to discounting, which Mecca doesn’t do – a lot to the dismay of some consumers. “Our philosophy is that we are ‘value add’, not ‘value off’,” says Horgan. “I think everybody else is racing to the bottom. Amazon is a totally friction-free, incredible, transactional experience at one end of the spectrum, and we want to be at the other end.” Mecca has already examined the worldwide market, launching into Tmall International, the Chinese language ecommerce giant, as a trial in 2020, though it pulled out in 2023. Its product launch into the UK and Europe is one other worldwide take a look at, in addition to a means to construct model recognition.

Horgan remains to be “noodling” about what international growth will appear like, however her mission is evident: “[The goal] was to be Australasia’s number one beauty destination,” she says. “Now we’ve changed it to be the world’s most-loved beauty destination. And while we do want everybody making the pilgrimage to Mecca Bourke Street, going international does follow. It almost feels like a social responsibility to take what I think is a genuinely differentiated beauty experience global.”