What: The British beauty retailer is hoping to capture a bigger share of the market through experiential stores and viral brands.

Why it is important: Space NK has seen success with its larger format stores despite intense competition in the UK beauty market.

The British beauty market is known for being difficult to crack with intense competition between department stores, digital mainstays, and drug stores.

UK beauty sales reached GBP 12.9 billion in 2022 according to Euromonitor International. As a result, Space NK is levelling up its brick-and-mortar presence and adding new trending brands to its offering.

Their approach may be paying off, as they saw sales increase 24% and revenue increase from GBP 119.1 million to GBP 142 million. Its in-store sales also rose 31% year-over-year and online sales grew 16% year-over-year while active customers also increased 33% to over 1 million.

Space NK currently operates 73 storefronts across the UK and Ireland, with five locations opening in the past year and two more planned to open this year.

In the past, the brand operated small neighborhood shops that were less than 800 square feet on average. However, the company shifted gears last year and added two large-format stores, both spanning over 2,000 square feet and featuring lounges, treatment rooms, trial spots, and areas for consultations.

At its upsized Westfield location, which is in the same shopping centre as Sephora’s new location, the company saw sales triple. Following its success, Space NK will be opening two more larger format stores and sees the bigger scale stores as the future of the business.

Opening new stores also helps the retailer’s online business, as they have seen an uptick in digital sales in the area.

The company is focused on growth and having a healthy delivery to the bottom line, which they are doing through brand building. Brand founders are attracted to the retailer because of its significant distribution network, local marketing expertise, and price positioning.

Space NK bets on experiential stores, viral brands for growth