Only 3% of the brands in Sephora are Black-owned—Here’s how the retailer is changing that

If you had walked by one of Sephora’s nearly 400 U.S. stores in May 2019, you would have seen in the window a large photo of a smiling Black woman accompanied by the slogan: “Color Up Close. Foundation for Everyone, Let’s Find Yours Together.” The displays featured other images of diverse models as well, enticing shoppers of all races into the store.

The campaign hit high streets and shopping malls at a crucial time for the mega retailer. That month, singer SZA (aka Solána Imani Rowe) had accused employees at the company’s Calabasas, California, location of racially profiling her. Other customers followed up by sharing stories of discrimination on social media. Sephora closed all of its stores for an hour of mandatory racial bias training for its 16,000 employees that was in the works prior to the tweets. To further demonstrate its commitment to inclusivity, the company tapped April Reign, the activist behind the #Oscars-SoWhite social media campaign, to serve as an adviser and donated millions to racial justice organizations, including the NAACP.

But there was another problem: While the company championed diversity, just 3% of the brands carried in its U.S. stores were Black owned.

This year, following the national reckoning over racial injustice sparked by the killings of George Floyd, Breonna Taylor, and others, Sephora is determined to do better. When fashion designer and Brother Vellies founder and creative director Aurora James launched the 15 Percent Pledge in May to challenge retailers to commit to carrying more Black-owned brands, Sephora was the first big company to sign on. Now the company is working to live up to this commitment.

James was inspired to launch the 15 Percent Pledge—15% of the U.S. population is Black—while scrolling through Instagram as the George Floyd protests gathered steam. Company after company was using the platform to make generic pronouncements about its support for racial justice. James thought retailers could make more meaningful change by committing to stock inventory from Black-owned businesses that mirrored the proportion of citizens. She posted about it on Instagram, tagging companies where she knew executives, including Shopbop, Target, Whole Foods, and Sephora. “Black small businesses are dying. And these [stores] are profiting off Black dollars: Their sponsored posts are seen on Black Instagram feeds; their stores are in Black communities,” she recalls thinking.

The post was quickly shared by influencers such as Guardian U.S. data editor Mona Chalabi and Selby Drummond, Bumble’s chief brand officer. Nine days later, Sephora signed on. In November, Macy’s and Bloomingdales came on board. “We liked the pledge because there was some accountability,” says Priya Venkatesh, Sephora’s senior VP of merchandising for skincare and hair. “We wanted to make changes that will have a long-term impact.”

Tipping Points: How some companies are striving to meet the 15 Percent Pledge

Beyond being the right thing to do, signing the pledge was also a savvy business decision. Gen Z customers (the biggest beauty buyers globally) are looking for brands with values that align with theirs: A commitment to transparency and social justice is meaningful to them. And African Americans, long ignored by mainstream beauty brands, are some of the biggest beauty consumers. A 2018 Nielsen poll found that Black shoppers spent $473 million in total on haircare (a $4.2 billion industry) and $465 million on skincare (a $3 billion industry).

Sephora decided to focus on growing the number of Black-owned brands available on its U.S. website, and created a section online to showcase them. (Sephora has made a 15% commitment for its U.S. businesses, including stores, online, and the Sephora app.) Throughout the summer, Venkatesh oversaw an audit of the brands Sephora carries and confirmed that only 3% of them were Black owned.

The retailer plans to double its BIPOC-founded brands by next year. Long-term, says Executive Vice President and Global Chief Merchandising Officer Artemis Patrick, Sephora hopes to build “an ecosystem that creates a platform for Black-owned and Black-founded prestige brands to grow.”

But it’ll take more than just shelf space to help Black founders succeed. Even before they bring their products to market, they face significant challenges. Despite the outsize success of companies such as the Rihanna-founded Fenty Beauty—which is co-owned by Sephora parent company LVMH—many founders lack the connections and funds to get a company off the ground. Aesthetician Shani Darden, whose skincare line is carried by Sephora, says that she bootstrapped her company for years before raising capital to expand. “I didn’t have contacts. I got lucky that some famous people, like Jessica Alba, liked my retinol,” she says. “[Brands] need to have name recognition to get into a place like Sephora. It can be hard for Black founders to get to that place.”

Sephora recently revamped its Accelerate incubator, which offers a six-week boot camp for independent brands, to focus specifically on assisting BIPOC founders. Starting in January, the program will help 8 to 10 Black founders develop their business and bring their products to market.

Sephora is mindful of the fact that Black beauty brands, once marketed only to women of color, now have crossover appeal. Fenty Beauty is known for pioneering 50 inclusive foundation shades for all skin types. Darden’s skincare range appeals to anyone looking for clearer skin. Nancy Twine, founder and CEO of Briogeo, a haircare company stocked by Sephora, says that the retailer was interested in her products because they were designed for customers of all hair types.

Building up a brand to meet Sephora’s inventory needs can be daunting. Twine was the only employee creating and selling her products when Sephora approached her with a deal. And though the retailer offers startups unparalleled brand exposure, the cut Sephora takes may not appeal to a company used to direct-to-consumer sales. Additionally, brands stocked in brick-and-mortar stores may have to pay for fixtures—the shelving and display areas where products are tested and sold—which can cost thousands of dollars. (Sephora works with brands to determine individual partnership agreements.) Wharton professor Santiago Gallino says that scaling quickly to meet the demands of a retailer like Sephora can be hard on a company’s supply chain and force compromises on product quality to meet Sephora’s expectations: “[It] might actually put them in a position where they are taking too much risk or too much credit to fulfill certain orders. You can end up in a situation where the stress of the growth can harm [the company].”

Even as Sephora works to fulfill its 15% commitment, the company has work to do internally. People of color make up 45% of Sephora employees but just 6% of leadership, according to George-Axelle Broussillon Matschinga, VP of diversity and inclusion, who joined the company in February. “We have eight members in our C-suite, four women and no African Americans. We know that there is an opportunity there,” she says. She’s also been working across LVMH’s other properties, which include Louis Vuitton, Dior, and Bulgari, to hold diversity training sessions for employees. (Currently, 26.2% of LVMH management positions are filled by nonwhite workers.) The conglomerate hired its first D&I chief in September.

When she talks to brands about the pledge, James emphasizes that it’s about more than simply adding Black people to marketing campaigns. “How are you including them in your business model? How are you including them in the profit? How are you including them in the money that you’re spending?” James says, adding, “Some partners are really gung-ho [about signing the pledge], which is incredible. But no one should be trying to do this overnight.”