Ulta Beauty to pause shop-in-shop expansion inside Target stores

Shop-in-shop concepts have been flourishing throughout this decade. Some examples include Toys"R"Us at Macy's, CVS Pharmacy at Target, INDOCHINO shop inside Nordstrom, SEPHORA at Kohl's, Nike House of Hoops within Foot Locker locations and many more. So, what's behind Ulta Beauty's decision to pause opening shop-in-shops inside Target?

Ulta Beauty CEO Kecia Steelman said at the J.P. Morgan 11th Annual Retail Round Up Conference held in New York from April 2-3, 2025, that Ulta and Target had jointly decided they need to improve the “shopper experience” in current Target shops. As a result, Ulta, after starting to open shops inside Target since 2021 and planning to open 800 of those shops has all of a sudden decided to pause the expansion. Ulta already operates more than 600 such shops.

The Ulta-Target model involves a royalty structure. Target buys and sells the Ulta inventory and staffs the shops. Ulta Beauty’s income from Target’s royalties is reported as other revenue.

Read more: Ulta Beauty pauses expansion of Target locations (The Minnesota Star Tribune)