In 2021, Target and Ulta Beauty announced a new partnership that would bring Ulta mini-shops into Target stores. Their store-within-a-store format began in 50 stores with plans to eventually expand to more than 800 locations. At the time, Target was getting a lot of foot traffic and wanted to bring higher-end beauty products into its stores. Ulta was hurting in the wake of the pandemic and looking for ways to increase profits. On paper, this was a great match.
Target opened approximately 600 in-store Ultas, but the partnership didn’t bring in new customers or drive up sales. The Ulta Beauty section was also often understaffed, which led to significant theft. Ulta Beauty is officially leaving Target in August 2026. Target will use that space to launch Target Beauty Studio. The press release claims it will feature “more than 60 new-to-Target brands.” Here’s more from The Street:
Target Beauty Studio: “And in Beauty, we’re preparing for this fall’s launch of our Target Beauty Studio in more than 600 stores, building on the momentum we’ve been seeing in the Beauty category. This includes working to minimize the disruption that these changes will cause, cultivating an assortment of trending beauty products, and building out robust plans to support an efficient transition,” [Target’s Chief Merchandising Officer Cara Sylvester] shared.
Replacing Ulta Beauty with Target Beauty Studio also gives the retailer something it never had under the partnership, complete control over its beauty assortment, merchandising strategy and customer experience. Instead of sharing space with another retailer, Target can now build a prestige beauty business that strengthens its own brand while keeping all of the sales.
The new section is being designed to “spotlight prestige beauty brands,” according to a press release. “The new space will be curated with more than 60 new-to-Target brands that meet growing guest demand for elevated, prestige products and trend-driven innovation across skincare, haircare, fragrance and cosmetics.”
The breakup: David Bellinger, a retail analyst for Mizuho Securities, said in a research note at the time the separation was announced that Target’s “messy in-store operations” as well as retail theft and insufficient staffing likely contributed to the end of the partnership.
Jefferies Analyst Ashley Helgans told WWD.com that the collaboration helped Ulta’s margins and brand reach, flagging that Target now becomes an Ulta rival.
“We see the possibility of Target becoming a greater competitor to Ulta as they continue to build out and improve their own beauty assortment, and currently have a 74% store overlap. We believe that Target has been able to leverage its learnings from the Ulta partnership to enhance its beauty offering across its fleet, not just stores with Ulta.”
I’m not surprised that Target and Ulta ended their partnership. Ulta’s actual stores have bounced back while Target has been struggling since they bowed down to the Trump administration and ended their DEI initiatives. I don’t blame Ulta for not wanting to be associated with them. The decision to use that space for a Target Beauty Studio with more products and employees dedicated to helping customers makes sense. It sounds a lot like what Target should have done with Ulta.
I can’t help but compare the Target/Ulta breakup with another retailer/beauty company union: Kohl’s and Sephora. Sephora was facing the same post-pandemic issues when it joined up with Kohl’s. Their partnership has been much more profitable. Last year, Sephora at Kohl’s made almost $2 billion. Both stores have benefited from the added foot traffic. A lovely woman helped me pick out a new concealer shade to match my summer skin tone. Kohl’s treats Sephora like an experience while Target treated Ulta as a tenant.
Header is a screenshot from a YouTube video by Andréa Matillano. Image above is a screenshot from a video by 11Alive. Image on homepage is a screenshot from a video by Target