Ulta Is Beating Expectations Unlike Sephora

[Alpha8472]

Ulta is showing very good earnings and is opening more stores. Sephora is not. Ulta's partnership with Target seems to have been a good fit.

Ulta has a range of price points including affordable prices at Target unlike Sephora's outrageously high prices.

https://chainstoreage.com/ulta-delivers ... -30-stores

[babs]

Ulta is showing very good earnings and is opening more stores. Sephora is not. Ulta's partnership with Target seems to have been a good fit.

Ulta has a range of price points including affordable prices at Target unlike Sephora's outrageously high prices.

https://chainstoreage.com/ulta-delivers ... -30-stores

Ulta at Target feels like it is a part of the store. And really isn't competing with existing Ulta stores, it complements them. Sephora at Kohls is walled off, looks awkward and competes with their existing store base. Very different executions that Target did well and Kohl's did not.

[storewanderer]

Target has foot traffic and lots of it.

Kohls from what I see is not getting much foot traffic anymore.

We will see who pays for the shrink in those Target Ultas and how that goes.

[babs]

Target has foot traffic and lots of it.

Kohls from what I see is not getting much foot traffic anymore.

We will see who pays for the shrink in those Target Ultas and how that goes.

I have a hard time believing anyone but Target is responsible for shrink. I highly doubt the product is on consignment or owned by Ulta in any way, that would be a nightmare financially. I have to image Ulta is just getting some sort of licensing fee.

[ClownLoach]

Looks like Kohl's is cutting back on this Sephora rollout. No matter how they try to spin it here obviously it wasn't a productive addition, otherwise they wouldn't be reducing the footage to a mere 750 Sq ft. So it's just going to be a small makeup department with categorized instead of branded displays and the "best of" SKUs along with private label. Sephora at Kohl's is obviously a flop.

https://www.thestreet.com/retailers/koh ... eauty-care

[storewanderer]

Noticed this week in Reno the freestanding Sephora Store that has been out with Dillards closed. I found it actually relocated to a smaller, downsized space elsewhere in the mall; the previous space was an end strip and visible but in a low traffic area (near Old Navy and Five Below and not real good compliments and neither get much traffic). The new space is closer to Ulta and definitely a higher traffic area. But the new space is much smaller than the old space Sephora had before.

There is a not great performing Kohl's about 1 mile away, that I assume is getting Sephora (I think I saw the new signs last week).

Sephora does not seem to be working to better the retail experience for its customers doing things like going to small set ups in Kohl's and downsizing existing freestanding stores in areas with high population growth.

[ClownLoach]

Noticed this week in Reno the freestanding Sephora Store that has been out with Dillards closed. I found it actually relocated to a smaller, downsized space elsewhere in the mall; the previous space was an end strip and visible but in a low traffic area (near Old Navy and Five Below and not real good compliments and neither get much traffic). The new space is closer to Ulta and definitely a higher traffic area. But the new space is much smaller than the old space Sephora had before.

There is a not great performing Kohl's about 1 mile away, that I assume is getting Sephora (I think I saw the new signs last week).

Sephora does not seem to be working to better the retail experience for its customers doing things like going to small set ups in Kohl's and downsizing existing freestanding stores in areas with high population growth.

If I remember correctly Sephora started out with moderately large stores for that category - around 15K or so which is comparable to a drugstore. They had large salons and big brand displays. Lots of chairs and vendor reps for makeup demos. At the time the first generation opened these weren't intended to be mainstream stores with near a thousand locations and certainly weren't planned to someday be in JCPenney or Kohl's.

Then they moved to a smaller size similar to Ulta which was a more productive format. I think the newer stores are around 8K to 10K. That seems to be an appropriate size especially when you consider the shrink implications of so many very expensive, tiny items. I think the majority of their fleet is this size and few of the first generation 15K locations remain. I believe their intent is to eliminate all these larger formats so that might be why your store closed.

So when you look at that history and then think about Kohl's only allocating 750 Sq ft in the newest stores - they basically devote the same or more space to kitchen electrics or men's socks. Basically they're cutting it back to just a couple of racks and wall gondola. It isn't going to meet the expectations of the Sephora customer, and the fact that they're now seemingly head to head with Ulta in the same lot or with a couple thousand feet inside Target makes me start to think this category is going to shake out about as poorly as the office supply superstore business has after they too overstored and built on top of each other at top rents, guaranteeing their mutual destruction as lease renewal rent increases doomed them all.