The UK’s beauty landscape is growing increasingly crowded, as players like Sephora, Harrods’s H Beauty and Flannels make a play for the space left when several department stores closed. Against this backdrop, and after exiting the US market last year, British retailer Space NK is making big swings to gain competitive ground on its home soil.
Top of the agenda is expanding a network of hyper-local stores. This year to date, the retailer has announced five new stores, including a new 4,600 sq ft flagship on London’s Oxford Street, slated to open in the second half of 2025 in the prime spot once occupied by Topshop (Space NK will sit alongside Ikea). It will also open a flagship in Birmingham in the summer, which will be its largest outside of London, as well as stores in Chelmsford, Leicester and Kent’s Bluewater Shopping Centre. The aim is to open another five across the UK and Ireland by year-end, bringing the total to 84.
The retail strategy isn’t just about square footage — it’s about deeply understanding how beauty consumers shop now and how they want to shop next, says CEO Andy Lightfoot. E-commerce now accounts for 50 per cent of the business, so an omnichannel strategy is key. “We want to make it incredibly easy to switch between channels. Customers can shop in store and then have all of their history available online to make any repeat purchases. This also sets up a funnel to further influence new product and category recommendations. It should be seamless.”
Meanwhile, Space NK’s stark boutique aesthetic has evolved. “We used soft furnishings to create an environment where you feel more able to touch and play with products — rather than a museum, which some of our stores certainly had that feel of,” Lightfoot says. Sizes range from 1,000 to 5,000 sq ft, depending on location, which spans high traffic shopping centres, commuter towns and big cities. “We’re not just sitting in a mall waiting for footfall,” he adds. “We’re part of our customers’ daily rhythm.”
Each store’s product mix and brand experience is tailored by postcode, says the CEO — from commuter hubs like Canary Wharf to affluent neighbourhoods like St John’s Wood or cities like Cardiff. “Every store must earn its return on investment,” Lightfoot explains. “And every location is chosen with purpose, and that’s what we have found drives customer urgency postcode to postcode.”
The tailored approach appeals to what Lightfoot calls “the grazing shopper”: someone who buys beauty on impulse — after work, during errands — rather than via the big-ticket hauls he has witnessed from US beauty consumers. That insight has informed both store placement and product curation. Emerging brands like Naturium and Reome now sit alongside high-performance icons like Augustinus Bader, Dr. Dennis Gross and Olaplex. Lightfoot doesn’t divulge the sales figures of the best-performing stores and in what cities, but says the newer concept stores that are “designed with copper and light wood (such as Battersea and Westfield White City in London) are generally our best performing”.
The Oxford Circus flagship will anchor this strategy, debuting a dual-mode format: part playful discovery, part expert haven. “You’ll see zones where customers can swipe, spray and test. But also areas that are quiet, curated, more intentional,” says Lightfoot. “This isn’t about Gen Alpha or Gen Z — it’s brand behaviour. Some brands demand play, others demand depth. We’re building for both.”
Spinning Space NK around
The retail expansion follows a four-year streak of turnover growth. According to Companies House filings, Space NK’s annual turnover has grown from £111.8 million in the year to 30 March 2021 to £196.5 million in the year to 30 March 2024. But that followed a more challenging period.
“Five years ago, pre-Covid, we were in a different position in the UK. We our footprint internationally was also challenging,” says Lightfoot, who took on the position in 2019 following former CEO Chris Garek’s move to chairman and was tasked with growing the bottom line. “While the world shut down [during the pandemic], I looked at how I would steer this organisation from what I saw as a sleeping giant into an incredible brand that was actually doing amazing things in terms of what it [a premium feeling shopping destination] represented to customers, but it was just doing a really bad job of telling anyone else about what it was doing.”
Lightfoot’s answer to the retailer’s re-rooting was “disarmingly simple”, he says; the leadership team created the Space NK flywheel. “You’ve got brands generating huge customer excitement and tapping into a kind of latent demand, where the desire for their products outpaces the available supply. It creates this interesting imbalance that drives momentum,” he says. Therefore, the retailer prioritised new brands not readily available in UK retail, “needing to go far upstream” for emerging players and bring them to the UK consumer. “We can then build credibility and maintain an engaged customer through the new brand life cycle,” Lightfoot says.
To bring the brand side of the flywheel to life, Space NK introduced names like Rare Beauty,
JVN Hair, Tatcha, Glossier to the UK market. “We were among the first to launch Sol de Janeirowhen it entered the UK six years ago, and although the brand is now viral, established, and well-distributed, we still maintain a huge amount of customers, customer engagement, and market share because we built that credibility where we became synonymous with it,” he adds.
In its turnaround, Space NK avoided over-indexing on legacy brands. “This is no comment on the quality or brilliance of established brands, but the challenge with brands like Mac Cosmetics, Clinique, Clarins, and the Estée Lauders of the world is that their range is the same everywhere they are, and you can walk in any direction and at 250 meters you can buy them. With ubiquity comes a pricing competition where a quick Google and you’re going to find a retailer that has them for 15 or 20 per cent off. So it’s very difficult to build real customer engagement through established brands,” he says.
Complementing its brand strategy is Space NK’s loyalty programme, NDULGE. The programme is designed less around transactional perks and more as a gateway to tailored experiences across online and physical channels. “We wanted to avert the premise of a loyalty scheme granting you rewards after your 50th purchase and instead offer customers a treat as soon as they signed up and then offering new experiences and interactions through the loyalty scheme to keep customers coming back,” he says. “The trick was to work with these new brands to create that demand for customers to bring them to Space NK, to buy and then crucially retain them,” Lightfoot says. The result? Space NK retains its existing customers at a 95 per cent rate and 75 per cent for new customers.
The American wake-up call
Space NK’s UK growth might not have happened without its strategic withdrawal from the US. In June 2024, it sold off 600 points of distribution — including eight standalone stores and its shop-in-shop network across Nordstrom, Bloomingdale’s, Hudson Bay, and Walmart — 17 years after the company opened its first US store in New York. (The buyer was the American beauty wholesale firm PCA Companies.)
Lightfoot is candid about the challenges associated with scaling in the region. “Look, the US is a vast country, and to be significant to the beauty brands, you need to have many distribution points,” he says. “The business was fine; the eight stores were profitable, but it wasn’t really growing overall, and competing with major players like Sephora and Ulta was quite tough — we were right in their backyard.”
More recently, the company transitioned to a shop-in-shop model, embedding itself in department stores and providing premium brands access to wider audiences. This “worked very well” for a time, says Lightfoot, offering smaller, founder-led brands access to large department stores while making a variety of smaller-sized brands manageable for the bigger stores. However, it was a cash-intensive model.
“Ultimately, we sold the business in June. It was sooner than we had intended because we hadn’t leveraged any economies of scale from the business model yet, but we were approached with an attractive deal, and we took it, allowing us to focus completely on the UK,” says Lightfoot. (Terms were not disclosed.)
The future of retail: What’s next for Space NK
While much of the industry speculates on seismic shifts in retail, such as AI’s ability to take over the retail space, Amazon’s dominance, or the continuous creep of online live shopping from retailers like TikTok Shop, Lightfoot is more grounded in his forecast. “I think the retail industry is going to evolve much slower than we think it will,” he says, “There isn’t going to be this big step change in the way people buy.”
That includes tech like AI, voice search and social commerce. “Sure, TikTok Shop is a thing — but it’s not going to change everything in two years. Older consumers still click, younger consumers scroll and shop where they are. The shift is slow and subtle,” he says.
This slow-burn evolution extends to how Space NK is thinking about expansion. For now, the UK and Ireland remain the focus. “We already ship to over 10 countries and 20 per cent of e-commerce sales are international,” he says, “but our current growth phase is firmly rooted here.” Still, agility is critical. “Retailers sit in the centre of a global Venn diagram,” he explains, affected by everything from foreign and domestic policy decisions to green legislation, oil prices and shipping disruption. “The ones coming out on top are those who have a clear vision and the flexibility to deliver to market in a myriad of different ways.”
That vision includes staying close to what beauty consumers want. Scientific innovation is top of mind. “Biotech will transform our shelves,” says Lightfoot. “It’s not about stronger niacinamide anymore — it’s hormone levels, polypeptides, protein strands. It’s more fundamental.” Category-wise for Space NK, skincare continues to dominate, makeup follows closely, and fragrance is one of the smallest but fastest-growing segments — aided by investment in scent education and upgraded shelf space so consumers are encouraged to test and explore different brands’ offerings. Haircare is also on the rise, says Lightfoot.
As for the rest of 2025? “No gimmicks,” says Lightfoot. “We’ll continue investing in the UK and Irish estate, sharpening online and in-store experiences, and delighting our millions of existing — and soon-to-be — customers.”
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