One of the last of the original indies is off the block.
Neither Target executives nor Kashuk would disclose the terms of the deal for the brand, which industry sources estimate has annual retail sales of around $75 million. Overall, Target’s beauty sales were estimated at $2 billion in 2013, the most recent year for which figures were available, with color cosmetics accounting for about $800 million of that.
“As we continue to double-down on style, we’re focused on offering high-quality, affordable products our guests can find only at Target,” said Brian Cornell, the retailer’s chief executive officer. “This acquisition solidifies a key differentiator within our beauty business.”
Kashuk is often credited with creating the masstige trend. She conceived the idea for her line — high-quality products at reasonable prices — while on a book tour with Cindy Crawford. “We were promoting our book in Target and I found myself overwhelmed walking up and down the aisles. I thought if I was overwhelmed, how must the average woman feel?” Kashuk said.
Today, the brand consists of more than 300 products, including color cosmetics, accessories, fragrance and body care and, most recently, skin care, with prices ranging from $1.99 to $39.99.
The deal also signifies a stronger emphasis on beauty for the Minneapolis-based Target, which plans on using the Sonia Kashuk brand as a platform to develop its own internal product design and development capabilities in the category. “It affords Target an opportunity to build capabilities that will allow us to grow and expand our beauty offerings in new ways in the years ahead,” said Cornell.
Kashuk herself will continue to play an active role with the brand through 2017, primarily in a creative capacity. “I’m not going anywhere — we are business as usual,” she said, noting that she just finished her spring 2016 collection. In addition, Kashuk will maintain her Liberty Street creative studio. “It’s important to have a presence in New York, and be part of it all,” she said.
At the same time, Target will build up its team in Minneapolis, according to Christina Hennington, senior vice president, merchandising transformation and operations, and will hire accordingly. “We have a track record of producing our own great brands in apparel and home and this is no different,” she said.
Hennington declined to comment on whether the retailer is planning more acquisitions in the beauty space, but didn’t rule out the possibility of creating further proprietary brands. “We are continuing to evaluate the marketplace and see where we can be a leading retailer in beauty,” she said. “There is definitely potential for that in the future.”
When asked where she sees the most opportunity, Hennington quickly ticked off the multicultural category, naturals and the burgeoning trend for Korean beauty products. “There is a ton of opportunity, especially in cosmetics, for women of color, and we are also continuing to see significant growth in naturals,” she said. “And the Korean market is an amazing hotbed of innovation and growth — launching brands like Laneige is a proof point for us that there are many opportunities to be had from importing from different markets.”
Kashuk herself, an avid traveler whose journeys to India, Japan and beyond often provide inspiration for her collections, is currently planning a trip to Korea, Vietnam and Thailand. She said that the acquisition will enable her to focus on doing the things she loves best. “One of the more difficult things as an entrepreneur with a small team is just dealing with the scope of volume of 1,800 stores. You get so excited about launching a product and then you have port delays,” she said. “The things you have no control over can be really difficult.
“I felt like the time was right to sell,” she continued. “I wanted to let go of some of the things that take so much time so I can focus on what I love — the creative aspect of what I do.”