Ulta Beauty to open shops in Target stores by mid-’21

NEW YORK — The nation’s largest beauty store chain, Ulta Beauty, has a deal to place shops in more than 100 Target stores by mid-2021.

The shops, which will each be about 1,000 square feet and carry makeup, skin care and fragrance, will operate beside existing beauty sections in Target stores, the companies said last week. Financial terms of the deal weren’t disclosed.

“It’s a combination of two winning retailers that have great momentum in the market that can redefine the category,” Target CEO Brian Cornell told The Associated Press.

The partnership stands to benefit both retailers as the coronavirus pandemic upends shopping habits and more people try to minimize potential exposure to the virus through one-stop shopping. The pandemic has dampened sales of lipstick as people wear masks, but the skin care business has enjoyed stronger sales. Both companies should increase their customer base. Combined, Target and Ulta have more than 100 million active loyalty program members across Target Circle and Ultamate Rewards.

Target’s cosmetics portfolio will expand and at the same time it may boost traffic at stores as people consolidate shopping trips. The Minneapolis retailer has been taking market share from competitors in all areas including beauty, where second quarter sales jumped 20% compared with the same period a year ago. Like other non-essential retailers, Ulta was hit hard when the pandemic forced it to close its stores in the spring, but business has been slowly recovering.

Ulta can win over new customers while it adds to its approximately 1,100 locations. Ulta, based in Bolingbrook, Ill., will train newly hired Target workers on the premium products. The shops will offer the same virtual tryon tools like GlamLab, which customers can currently use in existing Ulta stores. Customers who shop Ulta Beauty at Target online will be able to use free shipping available for qualifying orders as well as Target’s services like sameday and curbside pickup.

Both companies may be able to further encroach on traditional department stores like Macy’s that had seen cosmetics sales erode even before the pandemic as big box stores modernized their beauty sections, and as specialty cosmetics chains like Sephora and Ulta expanded rapidly.