The Limits of Mecca’s Retail Magic

What does it take to create a beauty wonderland?

Does it start with a solid gold concierge desk at the entrance of a three-story flagship? Does it imply glossy gondolas bearing the latest and greatest beauty wares from Charlotte Tilbury and Rhode?

For Australia-based Mecca, it’s all these things and more, including 8,000 team members fluent in over 200 brands and services of all kinds — from hair to makeup to nails to acupuncture and gut health — swirling together to create what founder Jo Horgan has called “Mecca magic.”

“When we got on the ground, I was [expletive] floored,” said Brian Bordainick, the co-founder and chief executive of acne brand Starface, which launched in Mecca in March. “The aesthetic, the vision, the experience — it’s 100 out of 10,” said Carina Chaz, the founder of Dedcool, which has been stocked at Mecca since 2023. Chaz was told that the average Mecca shopper spends three hours in store. “I was like, ‘Who has three hours to spend at a beauty store?’”

At nearly 30 years old with a fleet of 110 stores, Mecca has dominated the Australian and New Zealand beauty markets for its intimately personal approach to curation, of products and otherwise. But the company’s status is being challenged by global competitors like Sephora, which operates 34 stores in the region, and Amazon that remain far larger. Case in point: while Mecca recently landed Hailey Bieber’s Rhode, cosmetics label Hourglass debuted in Sephora Australia the very same day, ending its 16-year exclusivity contract with Mecca. Meanwhile, a growing number of Australian consumers are shopping for beauty online, mirroring trends in the wider global beauty industry. According to Euromonitor, Australia’s health and beauty e-commerce is still growing at twice the rate of the retail category. Before the pandemic, 70 percent of Australia’s beauty sales happened in stores; in 2025, it was closer to an even online and offline split.

Former L’Oréal executive Horgan, who started the retailer with her husband and chief financial officer Peter Wetenhall, was reportedly considering sale options valuing the company at around $1.5 billion as recently as last year, though a source close to the retailer said there is “no truth” to potential acquisition rumours. For the time being, that means the company’s success and survival depends on its continued dominance in its home markets.

The Mecca Magic

Gemma Dimond, a beauty editor in Australia, remembers her first trip to Mecca as when she acquired her first Orgasm. “I had never heard of Nars,” Dimond said. “Until I was 16 years-old and looking at a blush with the word Orgasm written on it. The appeal for me was that they had all these brands I’d never heard of.”

The draw has always been the brands, said Lily Twelftree, a data analyst who writes the newsletter Barefaced. Mecca launched in 1997 with local exclusives on Stila, Urban Decay and Nars. The retailer has maintained its reputation as a discovery destination since, leading all the way up to its Rhode launch — a huge upset for Sephora, who launched the brand in the US and UK in 2025. It recently added Starface, Fara Homidi, and Phlur to its stable.

Australia is an obvious target market for many brands in the US and UK, who gain a foothold on the other side of the planet and access to an English-speaking populace of beauty obsessives. And once you make the decision to do Australia as a market, founders often face the Sephora-Mecca conversation.

Since Sephora’s arrival to Australia in 2014, the two retailers have been locked in battle for brand exclusives. Sephora brought Tarte, Make Up For Ever and Kat Von D to the country. But Mecca, which had been there for longer, snagged buzzy indies Drunk Elephant and Charlotte Tilbury. By 2024, around 42 percent of Sephora’s US brands were already Mecca exclusives, said Twelftree, who analyses data from the Australian retailer in her newsletter. Some Sephora stalwarts, like Rare Beauty and Fenty, still attract shoppers, and Hourglass’ move from Mecca to Sephora show that some brands are still in play.

Sephora, for its part, won’t let up. In a statement to BoF, chief executive Guillaume Motte said Sephora Australia “will continue to invest in its Australia expansion, with store openings as well as upcoming brand launches and activations.” The retailer launched exclusive brands like Makeup By Mario, Patrick Ta and Haus Labs in the region.

There are unique benefits to launching in either retailer. Sephora’s Australian stores are part of its larger Southeast Asia and Oceania network, which comprises a total of 133 stores and include Malaysia, Thailand and Indonesia. Brands that enter Sephora Australia have built-in runway to enter its other global markets.

Mecca has its own way of sweetening the deal. The retailer handles a bulk of the heavy logistics involved in getting a brand’s products to Australia and then selling them there, dealing with the logistics, regulatory legwork and marketing. This means much slimmer wholesale margins — closer to 30 percent than a typical 50-50. “They essentially take a bigger margin, but as part of that contract, they own the whole end-to-end,” said Jules Miller, the founder of wellness label The Nue Co, which debuted in Mecca in August 2025. They also offer continuous support: Mecca placed The Nue Co prominently in a recent pop-up at the Australian Open, which the brand didn’t have to pay for.

It also relies heavily on best-in-class associates. Part of a brand’s onboarding process involves submitting hours of educational content to Meccaversity, an internal platform for store associates, or “hosts” in Mecca parlance. Founders are also invited to host lunch-and-learns with hundreds of hosts asking prying questions.

Initiatives like Meccaversity have helped the retailer develop unusually knowledgeable associates, able to hold forth for an hour or more about the specifics of Dries Van Noten’s perfume line. The company takes 3 percent of its annual turnover, an eight-figure sum, and invests it back into its education programme, according to the company.

“You walk in and it’s like one retail person per shopper. Sometimes you’re outnumbered,” said Twelftree. “It’s bloody impressive. If I was a brand, I wouldn’t be stocked anywhere else.”

Challenges Down Under

In most of the world, Mecca refers to one thing: the holy capital of Islam in Western Saudi Arabia that attracts millions of pilgrims annually. The English word appeared in the early 18th century, according to the Oxford English Dictionary, in letters from Mary Wortley Montagu, the wife of the British ambassador in Constantinople. She mentions Mecca twice: Once as the holy site, and again as the source of a strange skincare product: the “balm of Mecca.”

Montagu would be delighted, or at least intrigued, to discover Mecca’s newer double-meaning. But consumers in regions like the Middle East or Southeast Asia would likely be confused, or worse, to see a beauty store with the name pop up in their home markets. A spokesperson for Mecca said that, “As a secular business, we’ve never intended any connection to be drawn between the religious meaning of the word ‘mecca’ and our brand.” Still, its options for true global expansion remain limited.

Other case studies offer projections of Mecca’s future. Korea’s Olive Young essentially beat Sephora out of its home market, but with omnipresent stores and a very different brand mix — enough to partner with Sephora on designated shop-in-shop. The UK’s Space NK was acquired by Ulta Beauty in the US retailer’s own bid for global expansion.

The beauty experience Mecca provides, which attracts the best beauty brands from around the globe, would be a singular offering in New York, London or Tokyo, but the retailer’s way of doing business is uniquely hard to scale. “How do you replicate that in multiple markets at the same time with that level of touch?” Bordainick wondered. “Because it is by far the highest touch.”

But as a larger offer, the retailer’s magic could wear thin.

“If you were a Mecca customer, you felt like you were in on some sort of a beauty secret,” Dimond said. “That’s not the case now with how much the business has grown.”

At the same time, even Mecca’s most ardent shoppers are growing weary of the retailer’s premiumising range and persistent lack of discounting. “In their dominance, they’re starting to kind of fracture that relationship with much of the consumer,” Twelftree explained. Reddit threads bubble over with frustration about Mecca’s annual Boxing Day sale, which offloads past-season merchandise, and waning returns on the store’s Beauty Loop programme, which offers free samples based on spending tiers. When Hourglass left to go to Sephora, Australian shoppers rejoiced online, because Sephora offers steep discounts. (As one Redditor put it, “Finally Hourglass is being freed from Mecca jail.”)

In its pursuit of creating an unparalleled in-store experience, the retailer has to catch up to e-commerce, which is already the preferred method for buying beauty around the world. Mecca.com offers virtual consultations with makeup and skincare professionals, and digital visitors can access Meccaversity videos like “How to Create Your Signature Scent With Phlur’s Chriselle Lim.” But value-conscious consumers don’t want content — they want deals, which are likelier to be found on Amazon or TikTok Shop.

Much of Mecca’s site traffic is driven by searches for specific brands, suggesting that its core edit is its main attraction.

“You can have the best store experience in the world,” said Dimond, “but if you don’t have the products that I want to purchase, I’m turning around.”

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