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Woolies has introduced Dermalogica as it brings in more guest brands to boost beauty business

| On the move

Retailer Woolworths has just introduced professional skincare brand Dermologica to its stable, this as it tries to boost sales in its fashion, beauty, and home division which has consistently underperformed over the past several years.

Woolworths Store

Ntando Thukwana | Business Insider SA

Dermalogica typically operates standalone stores in South Africa and is commonly stocked by the Sorbet group of salons.

Although available only online, Woolworths customers will now be able to access Dermalogica's skincare services, such as the face mapping tool that provides skin analyses and expert advice for consumers.

The move is in line with its plans to drive growth specifically in its beauty offering, where it has ambitions to be a destination for shoppers' beauty needs.

In its attempts to bolster sales and cultivate growth in the fashion, beauty, and home unit, the retailer has gradually added third-party brands to its product offering.

Over the past five years, Woolworths has not been able to grow sales in this division beyond 4%, and in its financial year to end June 2021, turnover grew only a meager 3.5% to R12.8 billion.

Its apparel offering has primarily been to blame for the underperformance; excluding fashion, beauty and home increased 18% on average during the period.

Last month, during its results presentation, CEO Roy Baggatini unveiled the retailer's reviewed strategy citing Woolworths' plans to bring in more international guest brands. At the same time, it is streamlining its private-label offering.

"While turning around our fashion business is clearly critical to protecting our core, the growth in beauty and home provides us with the opportunity to expand more," Roy Bagattini said.

"We are building our beauty business as a destination category, and we're doing this through extending our offering to more doors, adding new brands, some of which are going to be exclusive to us, and growing our online business," he said.

In May, the retailer also introduced virtual beauty consultation and virtual try-on services where customers can trial make-up products from their phones and conclude their purchase online.

Bagattini, who departed from Levi's Americas to join the retailer at its helm almost 19 months ago, has also introduced global guest brands such as Levi's itself and Sunglass Hut. Almost a year ago, the retailer brought in German sandal brand Birkenstock to help boost its weak fashion sales.

"We are refining our product offering by reducing the proliferation in private label brands, colour, and styles. We're also selectively introducing guest brands that authenticate specific categories, such as Sunglass Hut, Birkenstock, and Levi's," Bagattini said last month.

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