Ulta Beauty is pausing expansion of its Target shop-in-shops this year, CEO Kecia Steelman said.
“In joint partnership with Target, we’ve made the decision to really lean into the 600-plus stores that are open this next year and really look at ‘How do we continue to drive efficiencies and leverage the learnings that we’ve had to really unlock value for both of us collectively together?‘” Steelman said at JPMorgan’s 11th Annual Retail Round Up Conference on Thursday.
The plan called for 800 in-store locations. A Target spokesperson confirmed that the expansion of the shop-in-shops has paused.
Steelman would not speak of the partnership beyond 2025, when the original one expires.
The agreement between the two retailers, which was first announced in 2020, follows a royalty structure. Target owns the inventory and staffs the shops. Ulta Beauty’s income from Target’s royalties is reported as “other revenue,” which includes credit card income and loyalty point redemptions.
Steelman, who worked at Target for 12 years, including as a lead store merchant, has been the driving force behind the collaboration that started with 100 store openings in 2021.
The collaboration has allowed Target to beef up its beauty offerings while also increasing Ulta’s exposure to more customers.
“Our more than 600 Ulta Beauty at Target locations have been a guest favorite, helped solidify our position as a beauty destination and driven growth,” a Target spokesperson said. “Our plans for stores and remodels evolve over time, and we’re working in close partnership with Ulta Beauty on future plans.”
