When Australian retailer Mecca opens the doors to its new Melbourne flagship in May, it will lay claim to being one of the biggest bricks-and-mortar beauty stores in the world. Situated in a 150-year-old, terracotta-clad building that was once an old book arcade at 299 Bourke Street, it spans 4,000sq m over three levels, with a cavernous, 11m-high atrium and mezzanine floor. Most recently the premises of Australian retailer David Jones’s menswear department, the site has been restored to its interwar glory. Mexican-inspired art deco details and arched windows are set against Le Bon Marché-style scissor escalators.
“We wanted it to have this subliminal theatricality,” says Mecca founder Jo Horgan. At 56 – and some 28 years after she created the business – she’s still wide-eyed about Mecca’s prospects. “How do you celebrate artistry? Let’s put a huge beauty carousel in the middle, let’s put in a beauty lab, a Mecca Atelier that does make-up, hair and nails all at the same time, so you are in and out in an hour.” Alongside products, the new store will also have a piercing studio by Maria Tash, an apothecary section aimed at holistic beauty, an aesthetic clinic offering full dermal treatments including lasers and injectables and a “350sq m ode to the spectacular magnificence of fragrance”. Horgan adds: “It’s high-level luxury service.”
The opening is a stake in the ground for Horgan who, since establishing herself as Australasia’s leading premium beauty authority, wants to take her vision global. And she is well on her way. Mecca served 4.5 million customers in the past year, and has 110 stores across Australia and New Zealand, employing more than 7,000 people. It sells products from 200-plus brands, around 80 per cent of which are exclusive. A high-end offering including La Mer, 111Skin and Augustinus Bader appeals to an older, moneyed demographic, while bestselling products from Go-To, Drunk Elephant and Glossier – which Mecca introduced to the Australasian market – are aimed at a younger shopper. Mecca also has its own range, Mecca Max, launched in 2003, as well as the Mecca Cosmetica line. Its hero is the To Save Face SPF50+ Superscreen – a pink-tinged cream with a natural finish – first released in 2007 and launched in the UK in 2023, which is consistently the bestselling product across the company.
Mecca is privately owned by Horgan and her husband Peter Wetenhall, although speculation is rife about a potential sale. The company does not reveal sales figures, although it says it has grown tenfold in the past eight years. In 2022, a report by IBIS put Mecca’s revenues at close to $1bn (about £500mn), while an industry source estimates revenues to be north of £750mn. This figure pales in comparison to that of its main competitor, Sephora, the French beauty behemoth owned by LVMH, which posted double-digit growth in revenue and profit in 2024 (the company does not break out exact figures but its selective retailing arm, of which Sephora is part, posted €18bn in revenue) and has more than 3,000 stores in 35 countries. In Australia and New Zealand, however, where Sephora has 32 branches, Mecca has retained market share. “Mecca is an incredibly successful cosmetic retailer in Australia, with large-format stores that are real destinations and do incredible turnover,” says Craig Woolford, a senior consumer analyst at MST Marquee. “They’ve largely been able to see off the threat from Sephora coming to the Australian market. The go-to cosmetics destination for most people is Mecca.”
Today, Horgan is speaking from a meeting room in the National Gallery of Victoria, where she’s a board member. Her outfit – yellow cardigan, pink and brown swirling shirt and an oversized yellow chain necklace – matches her overwhelmingly sunny disposition. Her make-up today includes Nars tinted moisturiser, Gucci Westman’s highlighter and Chantecaille lipstick, as well as products from Mecca’s own line, including eyeshadow and lip liner. Originally from the UK, she moved to Australia with her family as a teenager, and worked in her 20s as a marketing exec at L’Oréal, where she admired “the way they layered different divisions to appeal to different consumers”.
Working at the biggest beauty company in the world spurred her to launch Mecca, aiming to disrupt an industry that she says was no longer serving customers. “It was this monopolistic approach where department stores absolutely dominated – they had 80 per cent share in Australia – and these massive global brands owned the retail space, the airwaves… They owned everything.” She adds that, back then, “the customer was 99 per cent female”, but many of the big companies were run by men who didn’t know how to serve that base and instead relied on focus groups. “I felt that there was a more instinctive way to play it.”
Horgan opened the first Mecca store in South Yarra, Melbourne, in 1997, a 65sq m space with a 4m frontage that she now jokingly describes as “retail suicide” because of its small size. She had persuaded seven brands to launch with her, including NARS, Stila, Urban Decay and Benefit, all of which were new to the Australian market, and whose size now owes a great deal to Mecca’s early support. “We set out with a clear vision to give control back to the customer, bring these exciting emerging, niche brands [to market] and provide an environment where the brands are in control of their experience,” she says.
Key to Mecca’s success – which didn’t come easily for the first four years – is customer loyalty, which Horgan attributes to the brand’s exceptional service and education. “We have built up a model where we spend four per cent of our turnover on education and ‘engagement of team’, and I think that has honestly been the core engine driver [of the business].”
Adds Woolford: “Mecca’s focus is on having a great store experience and generating a lot of sales, not generating a great profit margin.”
This is reiterated in the Bourke Street flagship with its new “MECCAversity” auditorium – an education space that will facilitate staff training as well as masterclasses and seminars for customers to learn about everything from how to master winged eyeliner to flower arranging and financial literacy. “We have such a powerful opportunity to redefine what beauty means to an already engaged consumer,” says Horgan. “I think health and wellness now is such a part of this industry, and we have a broader responsibility to expand our customer’s knowledge about anything and everything.”
Much of the customer hype at Mecca is generated by its loyalty programme Beauty Loop, which counted 2.9 million members last year. They are rewarded with a box of samples that arrives four times a year, the value of which is determined by different tiers based on annual spend. Level One, a “beauty discoverer”, is achieved by spending between $300-$600, while Level Four is gained by forking out more than $3,500. According to some customers, there is also a secret Level Five, called the “magic circle”, for those who spend more than $10,000 a year. “Mecca’s Beauty Loop performs extremely well with consumers due to the high perceived value of rewards and the extent to which they delight shoppers with ‘surprise’ gifts,” says McKinsey & Company associate partner Amanda Winchester. “In turn, this has allowed a natural community to form and create buzz around the programme online.”
The reward of Beauty Loop is an alternative to discounting, which Mecca doesn’t do – much to the dismay of some shoppers. “Our philosophy is that we are ‘value add’, not ‘value off’,” says Horgan. “I think everybody else is racing to the bottom. Amazon is a totally friction-free, incredible, transactional experience at one end of the spectrum, and we want to be at the other end.” Mecca has already tested the international market, launching into Tmall Global, the Chinese ecommerce giant, as a trial in 2020, although it pulled out in 2023. Its product launch into the UK and Europe is another international test, as well as a means to build brand recognition.
Horgan is still “noodling” about what global expansion will look like, but her mission is clear: “[The goal] was to be Australasia’s number one beauty destination,” she says. “Now we’ve changed it to be the world’s most-loved beauty destination. And while we do want everybody making the pilgrimage to Mecca Bourke Street, going international does follow. It almost feels like a social responsibility to take what I think is a genuinely differentiated beauty experience global.”
