Sephora delays Iran expansion

By Lucy Whitehouse

- Last updated on GMT

Sephora delays Iran expansion
Cosmetics retail giant Sephora has pushed back the opening of several outlets in Iran, reportedly because the right financial and political conditions are not yet in place.

A report from Reuters reveals that the French company will no longer look to open the stores this year as planned, and in fact will delay until the end of 2017.

"Nothing will happen until the second half of 2017 at the earliest because conditions are not yet in place for things to happen,"​ one of the sources close to the matter reportedly told Reuters.

The Iranian economy has been showing promise recently, with beauty one industry particularly picked out by researchers as likely to enjoy robust growth. However, this potential is being hampered by the current political and financial situation.

Iran: getting steady

According to a recent market report​ on the country by Euromonitor International, Iran’s beauty market in particular has been enjoying a period of growth and development.

The firm pins this on two key factors: young consumers and the economic growth possibilities offered across the board by increased stability in the economic situation.

Awareness among the young Iranian population is blossoming when it comes to beauty and personal care; a trend which is being complemented by 2015 having been “a year of stabilisation”​ for Iran.

As a result, prices were less volatile and the supply chain encountered fewer interruptions. Consumers’ purchasing power, which was badly affected during the review period, had a chance to heal, and thus demand for premium beauty and personal care products improved.”

Slow off the mark

Commentators have suggested, however, that the county’s growth potential is currently being hindered by various stumbling blocks, with a report in The Economist noting that the biggest problem is lack of finance.

Sephora’s move to push back its expansion in the country comes as confirmation of these criticisms.

The Economist report also criticises the bureaucracy in Iran, noting it “frustrates everyone​”, with the environment for foreign nationals hoping to live and work in the country depicted as fairly hostile.

The article says: “Statements from some public figures are discouraging. “We’re not going to go in their countries and we don’t want them to come and live in ours,” says Hadi Khamenei, the brother of the Supreme Leader.”

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