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Company Overview
We are the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. We focus on providing affordable indulgence to our customers by combining the product breadth, value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer. Key aspects of our business include:
One-Stop Shopping. We offer a unique combination of over 21,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools, as well as salon haircare products. We also offer a full-service salon in all of our stores.
Our Value Proposition. We focus on delivering a compelling value proposition to our customers. For example, we run frequent promotions and gift certificates for our mass brands, gift-with-purchase offers and multi-product gift sets for our prestige brands, and a comprehensive customer loyalty program.
An Off-Mall Location. We are conveniently located in high-traffic, primarily off-mall locations, and our typical store is approximately 10,000 square feet, including a salon of approximately 950 square feet. As of August 1, 2009, we operate 333 stores in 38 states.
In addition to these fundamental elements of a beauty superstore, we strive to offer an uplifting shopping experience through what we refer to as “The Four E’s”: Escape, Education, Entertainment and Esthetics.
Escape. We strive to offer our customer a timely escape without the intimidating, commission-oriented and brand-dedicated sales approach found in most department stores and with a level of service typically unavailable in drug stores and mass merchandisers.
Education. We staff our stores with a team of well-trained beauty consultants and professionally licensed estheticians and stylists whose mission is to educate, inform and advise our customers regarding their beauty needs.
Entertainment. Our catalogs are invitations for our customers to come to ULTA to play, touch, test, learn and explore. We further enhance the shopping experience through live demonstrations, customer makeovers and in-store videos.
Esthetics. Our store design features sleek, modern lines, wide aisles that make the store easy to navigate and pleasant lighting to create a luxurious and welcoming environment.
We were founded in 1990 as a discount beauty retailer at a time when prestige, mass and salon products were sold through distinct channels—department stores for prestige products, drug stores and mass merchandisers for mass products, and salons and authorized retail outlets for professional hair care products. When Lyn Kirby, our current President and Chief Executive Officer, joined us in December 1999, we embarked on a multi-year strategy to transform ULTA into the shopping experience that it is today. Based upon consumer input and feedback, we pioneered what we believe to be our unique combination of beauty superstore and specialty store attributes. In October 2005, Ms. Kirby was recognized by Cosmetics Executive Women (CEW) with a 2005 Achiever Award for achievement in the beauty industry. In May 2007, we received a 2007 Hot Retailer Award from the International Council of Shopping Centers (ICSC) for being an innovative retail concept.
Our Competitive Strengths
These competitive strengths have differentiated us from our competitors and are critical to our success:
- Differentiated merchandising strategy with broad appeal – we believe our broad selection of merchandise across categories, price points and brands offers a unique shopping experience for our customers.
- Our unique customer experience – we combine the value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer. We cater to the woman who loves to indulge in shopping for beauty products as well as the woman who is time constrained.
- Retail format poised to benefit from shifting channel dynamics – we are capitalizing on shifting trends in how manufacturers distribute and customers purchase beauty products by offering an off-mall, service-oriented specialty retail concept with a comprehensive product mix across categories and price points.
- Loyal and active customer base – we have approximately six million customer loyalty program members. We utilize this valuable proprietary database to drive traffic, better understand our customers’ purchasing patterns and support new store site selection.
Growth Strategy
We intend to expand our presence as a leading retailer of beauty products and salon services by:
- Growing our store base to our long-term potential of over 1,000 stores
- Increasing our sales and profitability by expanding our prestige brand offerings
- Improving our profitability by leveraging our fixed costs
- Continuing to enhance our brand awareness to generate sales growth
- Driving increased customer traffic to our salons
- Expanding our online business
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