For the second consecutive year, no dividends were paid to the company's founders.
While Mecca is focused on long-term growth through major investments in flagship stores, short-term profitability has taken a hit. Revenue grew from $1.21 billion in 2023 to $1.28 billion in 2024, but annual profit fell to $22.7 million from $27.9 million. The fall in profit has led to another year without dividends for leadership, prompting scrutiny of the sustainability of its growth strategy.
Established in 1997, Mecca has become a dominant player in Australian beauty retail. It surpassed the billion-dollar turnover milestone in 2023, confirming its industry-leading position. However, founders have not received dividends in recent years, as the company has prioritised reinvestment ahead of short-term returns. Mecca’s holding company RTCH did declare a $110 million dividend this year, though it was reinvested into stores, infrastructure and branding across Australia.
One of the most significant of these investments is the new 4000sqm “Mecca 3000” flagship store in Melbourne, reportedly costing $50 million. Located on Bourke Street in a revitalised heritage property, the massive store took over a former department store site and attracted long queues at launch. The financial effect of this large-scale store will not be fully known until the 2025 accounts are released, making short-term evaluation challenging.
Revenue has also been driven by exclusivity agreements with international beauty brands and a strong customer base. However, with limited discounting and stock provisions rising by $24 million due to obsolescence and losses, there are questions around operational efficiency. The market is also getting more competitive, with local retailers such as Myer revamping beauty offerings and overseas players like Shein and Temu entering the Australian market.
Challenges in the wider retail landscape are growing, including rising theft and increasing rental costs. While Mecca still leads the sector with double the beauty sales of Myer, maintaining that advantage will require balancing bold ambitions with financial stability.
