SEPHORA ENLISTS DDB TO ANCHOR ITS BRAND IN U.S.: FRENCH COSMETICS RETAILER READIES 1ST U.S. ADS FOR $20 MIL CAMPAIGN

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French cosmetics retailer Sephora will launch its first advertising next month, a year after it entered the U.S. and shook up the way beauty products are marketed to consumers.

The company has hired DDB Worldwide, New York, as its first U.S. agency after a quiet review that began early this summer. Sephora will break a $20 million campaign in October, pegged to the debut of its flagship store on New York's Fifth Avenue and the launch of its e-commerce site.

'UNUSUAL' CREATIVE

Peter Tate, DDB's New York president, declined to divulge details about creative but said it's "unusual."

The campaign is expected to be mainly print-based, with a few TV executions and online and radio components.

"Branding will be a critical part of the overall campaign," Mr. Tate said. "We need to take a well-defined brand concept and communicate it. We have to communicate what they do and how they do it."

Sephora, a unit of luxury-goods marketer LVMH Moet Hennessy Louis Vuitton, is still an unknown entity to a vast majority of the country's consumers. But U.S. cosmetic marketers and retailers are already well-versed in the Sephora mantra. The French retailer is credited with overhauling the way high-end makeup is sold.

Unlike department stores that set up separate counters for, say Estee Lauder or Clinique, Sephora arranges all beauty products by category. The concept allows consumers to sample all varieties of, for example, lipstick, without having to jump from counter to counter. The "open-sell" floor allows shoppers to bypass the traditional white-coated department store salespeople.

BIBLICALLY INSPIRED

Sephora -- a hybrid of the biblical Zipporah, known for her beauty, and "sephof," the Greek word for vanity -- brands itself as the "temple of beauty."

Many companies, it appears, now worship in Sephora's temple. For example, Estee Lauder Cos. is experimenting with an open-sell structure, and Victoria's Secret Beauty raided Sephora for its VP-marketing and merchandising, Sherry Baker.

LAWSUIT AGAINST MACY'S

But the France-based retailer isn't flattered by the imitations. When Federated Department Stores revamped its Macy's cosmetics departments in California, Sephora sued for trademark infringement.

In the lawsuit, Sephora complains Macy's makeup department and Souson house brand copy details of Sephora's design.

Sephora opened its first U.S. store in New York in July 1998; it now operates 29 outlets throughout the U.S.

Until now, its marketing strategy has rested largely on word-of-mouth and coverage in fashion magazines, as well as promotional events for store openings.

The company was established in 1993 from the merger of Boots Co. and Shop Huit, a French chain. It claims to be the largest cosmetics retailer in France and second-largest in Europe, with $250 million in annual sales.

AMBITIOUS PLANS

LVMH drafted an ambitious expansion plan after it bought the chain from Boots in 1997. LVMH plans to nearly double Sephora's U.S. stores from 29 to 50 by yearend and operate 100 by the end of 2000.

Over the next four years, it also plans to open 30 stores in France, another 20 throughout Europe -- where it now has locations only in Luxembourg, Spain,

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