Target and Ulta Beauty to End Shop-in-Shop Partnership Next Year

Target and Ulta Beauty said Thursday (Aug. 14) that they have mutually agreed not to renew their shop-in-shop partnership when the current agreement expires in August 2026.

The Ulta Beauty at Target experience, which offers access to beauty products and lets customers link their Ulta Beauty Rewards and Target Circle accounts, will continue in Target stores and on Target.com until August 2026, the companies said in a Thursday press release.

“Both companies remain committed to delivering a seamless shopping experience and product availability through the end of the partnership, as well as continuing to support their teams and partners during the transition,” the release said.

Ulta Beauty will continue to offer beauty and wellness products through its own omnichannel experience, including the online Ulta Beauty Marketplace that is set to launch later this year, and Target will continue to offer a “differentiated beauty assortment and new experience” for its customers, per the release.

The Wall Street Journal (WSJ) reported Thursday that Ulta Beauty CEO Kecia Steelman said in April that the company paused the opening of more shop-in-shop locations with Target and was considering how to operate the partnership more efficiently.

Target has posted 10 quarters of flat or falling sales, according to the report.

CNBC reported Thursday that Mizuho Securities analyst David Bellinger wrote in an equity research note that the end of the partnership was probably driven in part by Target’s issues with “messy in-store operations,” retail theft and insufficient staffing.

Reuters reported Thursday that Target has faced softening demand from customers, especially for discretionary purchases.

Target and Ulta Beauty announced in November 2020 that they would launch a shop-in-shop concept at the start of 2021, offering Ulta Beauty merchandise to Target customers online and in 100 Target locations across the country.

During the pandemic, Ulta Beauty had to lay off numerous staff members as its stores closed and sales shifted online.

PYMNTS reported in July 2024 that the collaboration with Ulta Beauty brought new and exclusive products to Target and catered to a wider range of customer preferences.

CNBC reported Thursday that there are currently Ulta Beauty shops in more than 600 of Target’s 1,981 U.S. stores.