Latest Move in Chain's Celebrity and Beauty Makeover

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COLUMBUS, Ohio (AdAge.com) -- In an expansion of its beauty- and celebrity-based marketing strategy, Kohl's Department Stores will launch a line of cosmetics endorsed by tennis star Serena Williams.
Photo: AP
Serena Williams is the latest in a mix of celebrity endorsers and beauty services Kohl's is using to set itself apart from competing discount chains.

Flirt! cosmetics brand
The new line, called Flirt!, was developed by Estee Lauder and will be available exclusively in the chain's 674 stores. It will debut in February 2006.

The deal with Ms. Williams is just the latest addition to Kohl's stable of celebrity endorsers. Daisy Fuentes backs a clothing line. Ashley Judd endorses the American Beauty cosmetics line. During the current back-to-school season, the chain launched a Hilary Duff-branded Candie's line. Next spring, Kohl’s will also launch a surfer/skater gear line from Quicksilver to be endorsed by celebrity skateboarder Tony Hawk.

The celebrity deals are a major part of the $11.7 billion retailer’s ongoing effort to distinguish itself from the highly competitive discount store pack.

Number of stores to double
Just last week, the Menonimme Falls, Wis.-based company announced an aggressive program to almost double its stores to more than 1,200 locations by 2010.

When executives outlined the ambitious plans last week, they touted the importance of Kohl's recently added "Beauty Department" cosmetics counters.

The higher-end cosmetics effort reflects Kohl’s formula: Don’t be as expensive as mall-based department store brands, but offer more than discounters such as Target and Wal-Mart. So while Target linked up with high-end designer Issac Mizrahi and Kmart has Martha Stewart, neither has cosmetic counters, opting instead for the traditional, self-service drugstore-style format with rows of brands.

Beauty Departments
Kohl's, meanwhile, has installed beauty departments that mimic those of traditional department stores, offering open product testing and sampling. Prices vary by brand, but run much lower than department store cosmetics.

“We are creating a niche with beauty that doesn’t exist,” said Julie Gardner, senior vice president of marketing at Kohl’s. “Right now [the consumer] can either go to a department store or go to mass retail. Beauty closes the circle for our customers who said they wanted fashion and beauty in one place. It’s also designed to draw new customers to Kohl’s.”

A TV campaign created by ad agency McCann Erickson Worldwide and slated to launch in September spotlights the beauty department with Ashley Judd promoting the American Beauty line, created by Estee Lauder.

“We’ve created an entire department from scratch for Kohl’s, brands that live in Kohl’s and are exclusive in Kohl’s,” said Kathleen Pierce of BeautyBank, a division of cosmetics giant Estee Lauder. “This was a great opportunity to reach consumers who are shopping in different places these days. The Kohl’s consumer was also asking for cosmetics.”

So why not give Kohl’s the Clinique brand? After all, Estee Lauder already successfully markets and distributes 23 tried-and-true cosmetics and fragrance brands in traditional department stores like Nordstrom and Macy’s.

New brands from scratch
“It’s the Estee Lauder heritage to create new brands from scratch,” Ms. Pierce said.

She defined the beauty counter consumer target as a 32-year-old soccer mom who shops Kohl’s weekly and is a very loyal consumer, but very busy. The chain’s longer hours, typically 8 a.m. until 10 p.m. -- longer than traditional department store hours of 10 a.m. to 9 p.m. -- are designed to meet her schedule better.

Undoubtedly, though, Estee Lauder had no choice but the new-brand route. After all, with department stores like Macy’s battling for shoppers and losing ground to discounters, placing brands like Clinique or Estee Lauder, which has recently used Gwyneth Paltrow as spokeswoman, at Kohl’s and Target would likely rile executives at mid-level and high-end department stores.

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