Sephora opened in Ginza in 1999 with 40-store plans — it closed all 7 stores in 2001

Sephora, the French cosmetics retailer owned by LVMH, opened its first Japanese store in Tokyo's Ginza district in November 1999 — a 10,300-square-foot, three-level beauty emporium that was the brand's bet on one of the world's largest beauty markets. The company planned 40 stores across Japan within five years.

By November 2001, Sephora announced it would close all seven of its Japanese stores by the end of the year. The $50 million-plus failure was one of the fastest exits by a major international retailer in Japan. The problems were structural: the fragrance-heavy model had little appeal in a market where fragrance made up just 2–3% of beauty sales; premium brands like Chanel, Lancôme, and YSL refused to supply the self-service retailer; and Japanese consumers, accustomed to beauty consultants at department store counters, found the 'try it yourself' format confusing rather than liberating.

Sephora president Jeff Daggett blamed the 'continuing economic downturn' in Japan, but analysts pointed to deeper issues: poor merchandise variety, unattractive pricing, and a format that had no natural advantage over Japan's drugstores, specialty stores, and department stores. The exit was the first market withdrawal in Sephora's history, predating later exits from Hong Kong, Vietnam, Taiwan, and Korea.