ULTA SHOWS HOW ATTRACTIVE THE BEAUTY MARKET CAN BE

Ulta Salon, a specialty beauty retailer, is expanding its store count across the U.S. while reporting a 12.5% same-store sales increase during the fourth quarter. There were several factors attributed to their performance. Ulta’s gross margins got a lift by their shift from coupons to more targeted offers. They also managed to boost traffic into the stores. They added 100 new stores in 2015, seeing net revenues increase 21% to reach $1.27 billion. With its plans to add 100 more stores in 2016, taking them to over 1,000 stores total, it will build on its success in small markets and downtown/urban locations.

The beauty segment is attractive to department store retailers, because shoppers make frequent repeat visits when they run out of a certain product. Several retailers, such as Kohl’s and Sephora-Inside-JC Penney’s, have specific plans to expand their beauty departments.

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Source: CNBC