Target's Beauty Transformation
Target Launches Target Beauty Studio to Replace Ulta in Nearly 600 Stores
Target is ending its five-year partnership with Ulta Beauty and replacing the in-store shops with its own concept, called Target Beauty Studio. The new format will roll out in nearly 600 stores by fall 2026, after the Ulta contract expires in August ABC10.
The split closes a chapter that began in 2021, when the two retailers teamed up to compete with the Sephora-Kohl's alliance. The new in-house concept will feature more than 80 beauty brands — including 60 that are brand new to Target TheStreet.
Why Target Chose to Go It Alone
Target CEO Michael Fiddelke unveiled the Beauty Studio concept in March 2026. He framed it as part of a broader push to reclaim the retailer's identity. "This new chapter of growth at Target is defined by clear choices," Fiddelke said, "rooted in a deeper understanding of our unique lane in retail" BeautyMatter.
By running the concept itself, Target cuts out revenue-sharing fees paid to Ulta. It also gains full control of sales data and customer insights from prestige beauty shoppers TheStreet. Target is investing $2 billion in its business in 2026. Of that, $1 billion is going toward store remodels and the Beauty Studio rollout Business Chief.
Beauty Is One of Target's Few Bright Spots
Target's overall sales have struggled. Its stock fell nearly 60% from its 2021 peak as apparel and home goods slumped Semafor. But beauty has been a rare winner. In Q1 2026, beauty net sales hit $3.39 billion — a 9.6% jump year-over-year Zacks.
More than 90% of Target's general beauty products are priced under $20 Global Cosmetic Industry. The new Studio will push into higher-end, prestige products. Confirmed brands include Supergoop!, The Ordinary, and K-Beauty innovators like Skin1004 BeautyMatter.
Wall Street and Analysts React With Mixed Signals
When Target and Ulta announced the split in August 2025, markets punished both companies. Target shares fell 2.8% and Ulta shares dropped 5.2% on the same day Seeking Alpha. Some analysts called it "retail's biggest breakup" and worried Target was losing a major foot-traffic driver.
By 2026, the mood softened. Beauty's strong sales performance reassured investors. But experts warn the Studio's success depends on store staff. "In beauty, store associates often rely on brands' own ambassadors," said Sonia Summers, CEO of Beauty Barrage. "Target must ensure their team can provide the same level of expertise" BeautyMatter.
What Ulta Does Next After Losing 600 Target Shops
Ulta CEO Kecia Steelman has defended the split as the right call. "Great leaders can't be afraid to make bold decisions, pivot quickly, and keep moving forward," she said ABC10. The company is now pivoting toward a wellness model with a new concept called Wellness by Ulta Beauty.
The new Ulta boutiques — between 300 and 600 square feet — focus on nutrition, intimate care, and "ingestible beauty" products Glossy. Meanwhile, Walmart is moving in the opposite direction, rolling out "Beauty Experts" to 425 stores — copying the service model Target is now trying to build for itself TheStreet.
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