Beauty’s Retail Sprawl

Shoppers are buying beauty in more places, and soon they'll have more stores to encourage that habit. Some beauty retailers — namely Ulta, Bluemercury, Bare Escentuals and Sephora via J.C. Penney — have unrolled blueprints for aggressive store growth, which in most cases will accelerate in 2008. Regis Corp. plans to ratchet up the competition by transforming its 630 Trade Secret stores into "beauty boutiques," which in addition to professional hair care will carry skin care and cosmetics. It's a model that bares a striking similarity to that of Ulta, the beauty retailer that houses salon, mass market and increasingly prestige brands under one roof.

Ulta, the Romeoville, Ill.-based retailer that went public in October, has built a chain of some 236 stores located in suburban off-mall shopping centers, and plans to end the year with 250 doors. Ulta's president and chief executive officer, Lyn Kirby, said the chain has the potential to grow to 1,000-plus stores over the next decade.

In high-end shopping hubs, the Washington D.C.-based Bluemercury aims to reposition itself from a Northeastern beauty apothecary into a national player. The 26-store chain — which is now in Los Angeles, Chicago, Philadelphia and Princeton, N.J. — plans to open 30 more doors in 2008. The firm wants to maintain a 30-stores-a-year pace and reach 300 stores by 2010, said Marla Malcolm Beck, founder and ceo of Bluemercury.

The mineral makeup brand Bare Escentuals, which is sold in both Ulta and Sephora, continues to open its own stand-alone brand boutiques and has earmarked a long-term target of 400 such stores. Of its 33 company-owned boutiques that have been open for the year ended Dec. 31, 2006, Bare Escentuals' average annual net sales during the period was approximately $1,800 a square foot, according to the firm's annual report.

For its part, Sephora — which has about 180 stores — has aligned itself with Penney's and in early 2006 began opening stand-alone branded boutiques in the department store. The beauty shop has since opened in about 30 Penney's doors, and Penney's said it plans to accelerate the rollout of the Sephora concept next year.