Sephora, the cosmetics retail chain that is part of the LVMH group, is facing a challenging market environment in China and has announced in response that it will cut around 120 jobs in its China operations. This represents less than three percent of the company's total 4,000 employees there. The focus of the reductions is on streamlining the structures at headquarters to secure the company's long-term growth strategy in China.

Despite strong global growth figures, particularly in North America, the Middle East, and Europe, Sephora has been struggling in the Chinese market for years. The intense competition, especially from local brands and cheaper alternatives on platforms like Alibaba and Tmall, presents significant challenges for the company. This development follows similar reports from L'Oréal and Estée Lauder, which have also observed weakening demand in China, particularly for high-priced prestige products.

In a statement, Sephora emphasized that despite difficult market conditions, it remains focused on serving Chinese customers and providing an exclusive and innovative prestige beauty experience. However, the company has reduced its presence in other Asian markets, such as Taiwan and South Korea, over the past 18 months.

In the first half of 2024, Sephora was able to record a sales growth of eight percent in the selective retail sector, despite stagnant sales figures in other LVMH business areas such as fashion and handbags. However, the recent job cuts show that even a large company like Sephora feels the pressure in the competitive and price-sensitive Chinese market.