L'Oreal's Lancome beefs up stores as luxury cosmetics take off

PARIS (Reuters) - L'Oreal's <OREP.PA> Lancome brand is planning to open a flagship store in China after launching its first major showcase in Paris this week, its chief executive said, as the company capitalizes on booming demand for high-end cosmetics.

Luxury goods makers and beauty firms are increasingly shifting sales online, but many are also sprucing up stores and trying to turn them into day-trip worthy destinations to lure shoppers who are turning away from malls and other centers.

Lancome, one of the biggest brands of French cosmetics' group L'Oreal, already sells its creams and make-up though airport retailers, department stores and other networks, including 50 freestanding stores in China.

It is launching a 300 square meter flagship store on Paris' Champs Elysee avenue, a major tourist magnet. The concept, which includes video gimmicks on interactive walls, mirrors similar moves by other fashion or sporting brands, Lancome CEO Francoise Lehmann said.

A second flagship store is planned for Beijing in 2020. Lehmann declined to give financial details.

Groups like Louis Vuitton owner LVMH <LVMH.PA> are also spending on jazzed-up retail ventures - the French conglomerate is about to relaunch a major department store on the banks of the Seine river - even as some historic peers like Barneys in New York struggle and are having to slim down.

Pricier luxury cosmetics have proved a sweet spot for beauty firms like L'Oreal and U.S. rival Estee Lauder <EL.N> in recent quarters, driven by thriving demand from Chinese consumers and despite competition from start-up make-up brands.

"Young Chinese women are drawn very early on to skincare products," Lehmann said, adding that even among 20 to 35 year-olds, rejuvenating treatments were particularly popular.

(Reporting by Sarah White; Editing by Kirsten Donovan)