Many retailers today are moving from an online brand to brick and mortar, but one merchant has taken the reverse route: H20+ closed its last store and now exists solely as a beauty brand ready for a relaunch.
The 26-year-old brand has been renamed H20+ Beauty and under the leadership of CEO Joy Chen, formerly of Yes To, the brand is rolling out new packaging, new products and a direct-to-consumer business model that includes trial kits.
Chen joined H20+ in February 2015, and "it took about 30 days to figure out what I wanted to do," she told FierceRetail. She quickly ceased manufacturing in Chicago, the company's former home base, and outsourced to other facilities in the United States.
At its peak, H20+ operated 75 stores and did roughly $100 million in annual sales. But the last two brick-and-mortar locations closed in December, and the focus is now on a younger, more digitally savvy shopper.
"Our website is now our flagship store," said Chen. "We've made a major shift based on the consumer and how they shop today, which is omnichannel. We're also mobile-first, which is a big change for us."
"H20+ has always been a brand, but owning our own retail is not part of the strategy anymore," said Chen. "[This] will allow us to be found by more consumers over time."
The new website launches this month and will be supplemented with brick-and-mortar partners more specialized in beauty, including Ulta with close to 40 SKUs.
But digital is the mantra. "Even when a brick-and-mortar retailer has a store, they also have a website," Chen said. "For example at Ulta, the launch at Ulta.com will be equally important."
The new product line in redesigned packaging launches May 16 and includes trial-size kits available for $15 (including shipping). Buyers get a $15 voucher to upgrade to a full size on their next purchase, a twist on the subscription box model.
The strategy may be minus flagship stores, but Chen hasn't given up on retail completely. The company opened a pop-up shop at its new San Francisco headquarters to showcase its products. The shop has performed so well that it will remain open at least through 2016.
Ulta headed downtown with new HQ
Ulta grows e-commerce 44%
NRF names Ulta's Mary Dillon a retail Power Player