After wrapping up a multi-year collaboration with Ulta Beauty, Target is set to unveil its new, proprietary Beauty Studio concept—a strategic shift that analysts believe could strengthen Target’s stake in the competitive beauty market over the long term.
On Sunday, Target officially ended its shop-in-shop arrangement with Ulta Beauty, closing a partnership that had previously brought Ulta’s offerings to hundreds of Target locations nationwide. In place of scaling back, Target is actively introducing new initiatives aimed at boosting its market share in the beauty sector.
600+ Ulta Locations Transitioning to Target’s Beauty Studio Experience
The initial news of the partnership ending was made public in a joint statement from Target and Ulta Beauty released in August last year, affording both retailers nearly twelve months to coordinate the transition. As a result of the partnership’s termination, shoppers can no longer link Ulta Beauty Rewards with Target Circle, though Ulta customers will retain any points accumulated through Target purchases made prior to Sunday in their Ulta Beauty accounts.
To fill the gap left by Ulta’s exit from over 600 Target outlets—representing almost a third of the chain’s approximately 2,002 U.S. locations according to Target’s May 2 SEC filing (see filing)—Target plans to replace them with its in-house Beauty Studio. The retailer expects to launch the Studios in roughly 600 locations, but has yet to share a specific launch timeline or list of which stores will participate.
Target’s continued commitment to the beauty segment was highlighted during a financial community meeting in March, where Chief Merchandising Officer Cara Sylvester discussed the upcoming Beauty Studio concept. According to Sylvester, the retailer also intends to integrate beauty-focused rewards into its loyalty program—a move included in the broader transformation plan under CEO Michael Fiddelke.
GlobalData Managing Director Neil Saunders pointed out that even after parting ways with Ulta, Target’s beauty business remains formidable. Saunders suggested that although the dissolution of the partnership posed short-term challenges, Target’s ability to oversee its beauty offerings may ultimately drive increased profitability.
Surge in Beauty Sector Fuels Retailer Investments
The battle for customers in the growing beauty market has prompted other mass retailers to ramp up their own efforts. Recently, Walmart revealed plans to grow its dedicated beauty store associate program to 425 stores after positive results from a pilot, heightening competition for beauty spending.
Underlying these strategies is a robust beauty market in the United States. New Circana figures from Tuesday show prestige beauty sales rose 7% year over year, reaching $17.1 billion in the first half of 2026. At the same time, mass retail sales also increased 7%, hitting $39.2 billion.
Target’s own performance echoes this industry growth. For the first quarter, net sales increased by 6.7% to $25.4 billion, while the beauty category soared approximately 9.5% to just under $3.4 billion. These results indicate that Target’s latest investments appear to be driving gains in a highly challenged sector.
Consumers Blend Mass and Specialty Beauty Buying
Industry experts observe that American shoppers are shifting the way they browse for beauty products. Kearney’s beauty and luxury manager, Ally McPartland, remarked that the “distinction between ‘mass retailer’ and ‘beauty specialist’ is fading.” According to preliminary data from Kearney’s soon-to-be-released “Future of Beauty” study, around 45% of beauty shoppers in the U.S. use mass channels, while 44% choose specialty destinations.
McPartland explained that shoppers are selecting retailers based on factors like product selection, personalized experience, convenience, and sense of community, not just retailer category. She also noted that brands’ approaches to these evolving behaviors will shape where customers ultimately place their loyalty.
Target’s move to introduce its own Beauty Studio—in the wake of ending its deal with Ulta—mirrors a sweeping industry push by mass retailers towards innovation and deeper integration, all aimed at securing a larger portion of the fast-growing beauty business.