NEW YORK (AP) — 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, skincare, and fragrance, will operate beside existing beauty sections in Target stores, the companies said Tuesday. 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 on Monday.
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.
COVID has dampened sales of lipstick as people wear masks, but the skincare 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.
Both companies may be able to further encroach on traditional department stores like Macy’s which 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.
“More than ever before, now is the time for innovation in retail,” said Mary Dillon, CEO of Ulta Beauty.
Shares of Target rose a little more than 1% while Ulta’s stock was up roughly 5%.