In a significant retail shift, Target has concluded its collaboration with Ulta Beauty, a move that reflects the dynamic nature of the beauty market. This transition points to Target’s evolving approach to capturing a substantial share in the beauty sector.
Transition Plans Post-Ulta Partnership
The separation from Ulta, originally announced in a joint statement in August, took effect on Sunday. Although account linking between Ulta Beauty Rewards and Target Circle is no longer possible, points from qualifying purchases made at Target before the partnership ended will still be honoured in Ulta accounts.
To fill the gap left by the over 600 Ulta shop-in-shop outlets, Target is introducing its own initiative — the Target Beauty Studio. This new setup is planned for approximately 600 locations across its U.S. operations, although specific opening dates and locations remain undisclosed.
Revamping the In-Store Experience
Target’s Chief Merchandising Officer, Cara Sylvester, hinted at the Beauty Studio experience during a March financial community gathering. This development is part of a broader turnaround strategy led by CEO Michael Fiddelke, positioning Target to incorporate beauty-focused rewards into its loyalty programme.
Industry expert Neil Saunders noted that despite Ulta’s exit, Target’s robust beauty business is well-positioned to thrive. The retailer’s new focus on premium and innovative beauty aligns with its strategy for greater control and improved margins in this competitive market.
A Growing Beauty Market
Target’s most recent financial results highlight the retailer’s progress on its transformative plans, with a 6.7% increase in net sales, reaching $25.4 billion, and a notable 9.5% rise in beauty sales, totalling nearly $3.4 billion in the first quarter.
The U.S. beauty market is seeing growth in both prestige and mass segments, with sales climbing by 7% to $17.1 billion and $39.2 billion respectively, as reported by Circana data for the first six months of 2026.
Competition Intensifies in Beauty Retail
Alongside Target, Walmart is also expanding its footprint in the beauty category, unveiling plans in April to introduce a new beauty store associate role to 425 locations after a successful trial run.
Ally McPartland from Kearney notes that the traditional divide between mass retailers like Target and beauty specialists such as Sephora and Ulta is diminishing. Consumers are increasingly choosing products based on curation and experience, regardless of whether they come from specialty or mass channels.
With nearly equal percentages of U.S. beauty shoppers purchasing through both mass (45%) and specialty (44%) channels, the future will depend on how retailers respond to consumer behaviours and preferences, according to McPartland. This shift underscores the need for adaptability in the ever-evolving beauty retail landscape.
Reporting based on coverage first published by retaildive.com.