French cosmetics and fragrance retailer Sephora, owned by troubled LVMH Moët Hennessy, has assigned the lease from its 21,000-sq.-ft. Rockefeller Center store to Façonnable. Although the swap is a successful expansion for the clothier, which is substituting a 10,000-sq.-ft. Fifth Avenue site for Rock Center, Sephora's departure may indicate an irrationally exuberant expansion.

Sephora said in a statement that its Rockefeller Center location did not meet operating targets, and that it is focusing on smaller-scale shopping experiences. Faith Hope Consolo, vice chairman of Garrick-Aug Worldwide, explains that the Rock Center store's large, multi-story space “just didn't work. Beauty is almost impulse buying. It does better on one level where you can see everything.”

Wendy Liebmann, president of WSL Strategic Retail, says that the Fifth Avenue neighborhood is full of department stores that include full-service cosmetics sections, and by marking territory in this “‘beauty district,’ Sephora was putting the line in the sand, saying ‘here we are.’”

Is Sephora, in the exit, guilty of overexpansion? “They were very aggressive, they were moving very quickly. I wouldn't say they made stupid deals, but they made too many deals at once,” Consolo says. The company has recently pulled out of Japan and Germany.

A company spokesperson denies that Sephora has overreached the American market. Rock Center was a rotten apple in the bunch, she says, not a harbinger of “additional closings. The company will continue to evaluate its business, and that includes opening new stores.”

In fact, the spokeperson continues, “LVMH announced a couple weeks ago that same-store sales are up 25% in the most recent quarter. This is a company that's just getting started and they are trying to get an idea of what style works best for them — and it's the smaller stores.” Notably, Sephora recently backed out of a Times Square trade-up, deciding instead to renovate an existing 7,500-sq.-ft. store.