Ulta is hitting pause on its Target shop-in-shop expansion. Newly minted CEO Kecia Steelman told an audience at J.P. Morgan’s annual Retail Round Up Conference last week that the beauty retailer would hold steady at its roughly 610 Target shop-in-shops this year.
“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, according to a Seeking Alpha recording of the conference.
That comes after the two opened 101 Ulta Beauty at Target locations in 2024. Steelman said back in Q2 last year that Ulta was still on track to meet its 800-store commitment with Target. An Ulta spokesperson did not immediately respond to a request for comment from Retail Dive on what drove the decision to pause, if expansion would continue in 2026 and how Ulta would be working with Target to improve the current locations.
At the J.P. Morgan conference, Steelman also declined to comment on what the beauty retailer planned to do past 2025.
“We've taken a little bit of a pause in opening more stores, but that is really to just make sure that we're working on all the things that we've learned over the last three years collectively together,” Steelman said, emphasizing the drive to bring greater value to both companies.
Ulta has been in the midst of a rough period: The beauty retailer lost market share in beauty for the first time last year and saw sales fall roughly 2% in Q4. Dave Kimbell in January unexpectedly retired as chief executive and the company tapped then-COO Steelman to take over that role. Kimbell remains an adviser to the retailer until late June.
Since that transition, Steelman has moved swiftly to overhaul the beauty retailer’s C-suite, bringing on a new chief marketer, shuffling C-suite titles to include a chief retail officer and a chief technology and transformation officer, and adding digital to the list of responsibilities for Chief Merchandising Officer Monica Arnaudo. Arnaudo, too, is set to leave the beauty retailer this spring.
Ulta’s Target partnership is a major play for new customers and was viewed positively by many when it was first announced in 2020. But it came around the same time that Sephora made a deal with Kohl’s to open shop-in-shops inside that department store, putting Ulta and Sephora in more of the same shopping centers and increasing competition between the two. Indeed, Ulta has talked for months about the negative impact of competitive expansion in the past two years as 90% of Ulta’s stores have come under pressure from one or more new beauty locations in that time.
