Marianna Papadakis Reporter

Marianna writes for The Australian Financial Review and Business Review Weekly from the Sydney newsroom. She has an interest in legal affairs, technology and business.

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Napoleon Perdis sticks with department store growth plan

Published 12 February 2013 11:48, Updated 26 November 2013 18:35

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Napoleon Perdis sticks with department store growth plan

Napoleon Perdis, pictured with models and Margi Evans–Milich, says DJ’s helped put his brand on an international footing. Photo: Marco Del Grande

Napoleon Perdis is on an expansion rampage in Australian and internationally, as more department stores seek the brand.

Speaking from Sydney where Perdis is relaxing with family after acting as make-up director for the recent David Jones Autumn/Winter 2013 fashion launch, working with model starlets Miranda Kerr and Samantha Harris, he said he was pursuing growth in the US where the market was bigger than Australia.

Perdis says the cosmetics retailer would continue his nine-year relationship with David Jones after its contract expires in July. He says the department store had helped put the brand on an “international platform” and gave it a 7 per cent increase in floor sales in the past year.

He is in talks with Myer but also has plans to expand retail distribution into regional Australia.

Napoleon Perdis already distributes its sister label NP Set to Target and Big W, and pharmacies like Terry White, Amcal and Soul Pattinson.

But its biggest push in the next few years would be expansion in the US, which holds 45 per cent of the global cosmetics market and where he is in talks with Barneys New York and Saks Fifth Avenue after recently signing deals to put his products into exclusive luxury department store chains Bergdorf Goodman and Neiman Marcus.

“We are the first independent make-up brand to reach that global level,” he said. “As customers feel safe with me, I can value add to their experience and achieve my market share on a per distribution category basis.”

Perdis is also in the middle of signing deals with a distributor agent to open concept stores and in department stores in eight countries in the Middle East as well as continuing discussions with Harvey Nichols and John Lewis department stores in London.

Further growth in Europe would be left to 2014-15, including plans for distribution to Galeries Lafayette in Paris and ambitions for a standalone store on the flashy rue Saint-Honoré.

Perdis shrugged off the threat of online cosmetics retailing, saying that while it is important to his business it brings in just 2 per cent of its total $130 million in sales.

But he says department store need to invest in staff and customer service to give women a unique experience in order to compete with the flood of customers heading online to buy cosmetics from discount sites like StrawberryNet.

“I do not compromise on the level of staffing in my stores. We have to keep human value in tact. Online stores must grow but it does not eclipse bricks and mortar,” Perdis says.

“People might replenish online, but the actual transaction of their major decisions is done in stores. They still want to feel and touch their foundation.”

He said online cosmetics discount retailing affected yields and spoiled consumers who became unwilling to pay the full price. This was affecting labour markets and quality.

“I want to manufacture quality products in Italy, France, the US and Australia. There is a reputational risk if you move to Asia. But consumers have to be prepared to pay for technology and labour costs.”

Research by IBISWorld shows the cosmetic and toiletry retailing industry in Australia is forecasted to draw $2.49 billion in revenue in 2012-13, up from $2.3 billion five years ago.

IBISWorld says that despite the ease of entry of newer brands like Red Earth, Jurlique and Lush in the past 20 years, growth would be constrained by competition, increasing by 2.3 per cent a year to 2018.