Target has added new brands to its beauty service. In an increasing number of stores, he also has mini-magasins of Ulta beauty with prestigious brands.
Melissa Repko | CNBC
Ulta Beauty And Target said Thursday that they had decided to end an agreement that opened make -up and beauty stores in hundreds of Target stores.
Target’s shares fell by around 2% at the start of negotiations, while Ulta shares slipped by around 1%.
In a press release, the companies said that the partnership – which also added some of the Ulta goods on the Target website – will end in August 2026. Target had added more than 600 Ulta beauty stores in its stores since 2021, according to a company spokesperson. It is nearly a third of the 1,981 American stores in Target.
Ulta Beauty at Target Shops led a smaller and rotary assortment of the goods in the own beauty retailer stores. They were made up of Target employees.
The loss of the products of the popular beauty retailer could be another blow to target because it tries to wader buyers and investors. Target annual sales have been almost stable for four years and expects sales to decrease this exercise. The actions of the company are worth less than half of what was back in 2021 when they reached a closing top of $ 266.39. He also faced both reactions on his collection of pride and his decline in key diversity, actions and inclusion initiatives.
The store traffic for Target has decreased from year to year almost every week from the week of January 27, a few days after the CEDI announcement of the company, until August 4, according to. Ai, an analysis company that uses anonymized data from mobile devices to estimate global visits to locations. Target traffic had increased from one year to the next in four weeks before January 27.
The only exceptions to this trend were two weeks on each Easter side, when traffic increased by less than 1% from one year to the next, showed the company data.
On profits and in investors’ presentations, the managers of the company based in Minneapolis had praised Ulta stores and its fashionable beauty brands as a way to generate traffic in stores.
During a presentation of investors in New York in March, CEO Brian Cornell underlined beauty as a category of growth for Target and cited it as a reason of confidence in Target’s long -term activities. He said that the company had acquired market share in beauty and that its sales in the category increased by almost 7% during the fiscal year which ended in early February.
The CEO of Target, Brian Cornell, 66, is expected to leave the company soon. The longtime target chief renewed his contract for about three years in September 2022 after the board of directors abandoned his retirement age of 65 years.
David Bellinger, an analyst of Mizuho Securities that covers retailers, said Thursday in a shares research note that Target’s “Disordinated Store Operations” as well as problems with retail and insufficient staff in stores have probably contributed to the end of their partnership.
“Overall, we see losing the Ulta Shop-In-Shop relationship as a negative development and the next CEO of something Target will have to attack,” he wrote.
In a statement Thursday, Rick Gomez in chief of Target, Rick Gomez, said that the discounter was “proud of our common success with Ulta Beauty and the experience we have delivered together”.
“We are impatiently awaiting what awaits us and we remain determined to offer the beauty experience that consumers expect from Target-a focusing on a fascinating mixture of beauty marks with continuous novelty, all with unbeatable value,” he said.
In a statement, the Director of Retail of Ulta, Amiee Bayer-Thomas, described the target agreement as “one of the many unique ways that we have brought the power of beauty to the guests nationwide”.
“While we continue to execute our Ulta Beauty Unleashed plans, we are convinced that our vast assortment, our expert services and our inspiring store experiences will strengthen our leadership in style and define the next chapter of our brand,” she said.