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Location, location, location. That's the strategy behind the success of Sephora, the European prestige beauty retailer owned by French luxury brand marketer LVMH Moet Hennessy/Louis Vuitton. Sephora aims to do for lipstick, perfume and skincare what category killers did for books and hardware.

Most Sephora stores sell some department-store standards such as Estee Lauder, Lancome and Shiseido. Pricing is on par with department stores, but there are no gifts-with-purchases.

"We don't advertise," says Howard Meitiner, president-CEO of Sephora in North America and South America. "We primarily focus on getting the right locations and getting editorial coverage and word-of- mouth."

Sephora opened its first unit in Manhattan's SoHo district last July. It has opened 23 others in the U.S. and plans to have 50 stores by yearend. Plans are underway for a flagship store in Rockefeller Center.

Mr. Meitiner, 46, a 20-year-veteran with DFS-LVMH's Asia-based retail business-took charge of U.S. expansion plans in 1997.

"We're looking for newness and exclusivity. That's part of the mystery," he says.

A case in point: Sephora snagged the exclusive rights to sell Club Monaco's color cosmetics-with the exception of New York and Seattle, where Club Monaco has its own stores. That agreement turned out to be fortuitous after Monica Lewinsky's appearance on "The Barbara Walters Show," where listeners heard Ms.

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