The End of an Era
Both companies confirmed in a joint statement that they have mutually agreed not to renew their partnership when the current agreement concludes next year. The news sent ripples through the stock market.
Amiee Bayer-Thomas, Chief Retail Officer at Ulta Beauty, said: “For 35 years, Ulta Beauty has revolutionized how people experience beauty – bringing together an unmatched assortment from mass to luxury. Our partnership with Target was one of many unique ways we have brought the power of beauty to guests nationwide.”
A Partnership Born from Pandemic Innovation
The Ulta Beauty at Target concept emerged during a transformative period in retail. Launched in August 2021, the partnership capitalized on changing consumer shopping habits during the COVID-19 pandemic, when customers sought one-stop shopping experiences to minimize exposure. While mask-wearing reduced lipstick sales, skincare products experienced robust growth, making beauty an attractive category for both retailers.
The collaboration placed approximately 1,000-square-foot Ulta Beauty sections within Target stores, featuring makeup, skincare, and fragrance products. These spaces were strategically positioned adjacent to Target’s existing beauty aisles and staffed by Target employees. The partnership also extended to Target’s online platform, creating an omnichannel beauty experience.
Challenges and Changing Strategies
Despite initial optimism, the partnership faced operational challenges that may have influenced its conclusion. Industry analysts pointed out that the Ulta sections often appeared disorganized, suffered from insufficient staffing, and featured inconsistent inventory. Some noted these spaces at times felt disconnected from the main store environment and were often separated by retractable barriers.
The partnership’s end comes as both companies refocus on their core strategies. Target is initiating a turnaround effort focusing on merchandising changes while dealing with stagnant sales and various external pressures. Meanwhile, Ulta Beauty is operating under new leadership, with CEO Kecia Steelman taking the helm in January 2025 after the departure of Dave Kimbell.
Financial Impact and Market Response
The financial implications of the partnership’s end appear manageable for both companies. According to analysts, Ulta earned royalty fees of 10–15% on sales made in Target stores, representing only a small revenue impact. Target, which captured the majority of revenue from the collaboration, will need to find new uses for the approximately 600,000 square feet of retail space currently occupied by Ulta sections.
Looking Forward
Both retailers remain optimistic about their independent futures. Rick Gomez, Target’s Executive Vice President and Chief Commercial Officer, said: “We’re proud of our shared success with Ulta Beauty and the experience we’ve delivered together. The magic of shopping for beauty at Target is the combination of on-trend products that delight consumers with an inspiring and convenient shopping experience. We look forward to what’s ahead and remain committed to offering the beauty experience consumers have come to expect from Target – one centered on an exciting mix of beauty brands with continuous newness, all at an unbeatable value.”
Target plans to continue to curate a differentiated beauty assortment featuring essential products, engaging trial events, and competitive pricing. The retailer isn’t abandoning shop-in-shop concepts entirely, having recently announced plans to open Warby Parker locations within select stores.
For Ulta Beauty, the partnership’s conclusion allows the company to refocus on its omnichannel strategy and core retail operations. Amiee Bayer-Thomas said: “As we continue to execute our Ulta Beauty Unleashed plans, we’re confident our wide-ranging assortment, expert services, and inspiring in-store experiences will reinforce our leadership in beauty and define the next chapter of our brand.”
Customer Transition
Until the partnership officially ends in August 2026, customers will continue to have access to Ulta Beauty products in Target stores and online. Shoppers with linked Ulta Beauty Rewards and Target Circle accounts will continue earning rewards on eligible purchases throughout the transition period.
The conclusion of this high-profile retail partnership marks the end of an innovative experiment in beauty retail collaboration. While both companies expressed pride in their shared achievements, their decision to pursue independent paths reflects the evolving nature of retail partnerships and the need for strategic focus in an increasingly competitive marketplace.
