Beauty behemoth Mecca cracks $1b in sales as consumers splurge on makeup, skincare, fragrance

Australia’s biggest cosmetics retailer Mecca has cracked the $1 billion revenue barrier as persistent cost-of-living pressures fail to dent consumer appetite for make-up, skincare and fragrances.

New filings to the corporate regulator revealed the Jo Horgan-founded business raked in just over $1.2b in revenue in the year to the end of December 2023, up from the $971.5m recorded in the previous year. Net profit rose from $26.9m to $27.8m.

Having first launched Mecca with a single shop in Melbourne’s South Yarra in 1997, Ms Horgan and her husband and co-founder, Peter Wetenhall, have put Mecca in almost all major malls and store fronts in wealthy suburbs around Australia.

Nationally, it has a footprint of more than 100 stores — including seven in Perth — and a presence online. It sells more than 200 brands across categories including make-up, skincare, fragrance and hair care.

A Mecca spokeswoman declined to comment about the retailer’s financial performance.

Despite higher interest rates and inflation forcing households to cut back on other discretionary items, Australians’ appetite for cosmetics and beauty products appears to be holding up. Experts have dubbed it the “lipstick effect”.

Reportedly coined by beauty giant Estee Lauder’s former chair, who noticed an increase in the sale of lipstick during the US recession of the late 1990s, the lipstick effect reflects the idea that consumers will turn to small indulgences in times of economic downturn when they can’t afford larger luxuries.

Mecca in recent years has faced speculation over whether the co-founders would put the business up for sale. A company spokesperson has previously denied Ms Horgan was contemplating a sale.

According to the latest accounts released this week, Ms Horgan and Mr Wetenhall — both listed as directors of Mecca — did not pay themselves any dividends. In 2022, the pair pocketed $12m.

Mecca holds the biggest market share in make-up in Australia at about 21 per cent, which far outstrips that of Sephora, the cosmetics chain owned by French luxury goods giant LVMH.

Sephora’s Australian division reported a loss of $13.6m in 2023, while online beauty retailer Adore Beauty, another major industry player, reported revenue of $195.7m in the 2024 financial year.

ASX-listed Adore Beauty has signalled its intention to open more than 25 stores nationally within the next three years.

It has already opened two in Victoria.

Mecca’s 2023 accounts — which were late by about a year — come as the Australian Bureau of Statistics on Thursday revealed household spending posted a modest 0.1 per cent lift to $75.7b in April, continuing the run of softer consumer spending data so far in 2025.

Contributing to the growth was a lift in spending in hotels, cafes and restaurants (up 2.2 per cent), health (up 1.7 per cent) and recreation and culture (up 1.1 per cent), likely fuelled by back-to-back Easter and Anzac public holidays in April.