ULTA TO BUILD ONLINE PRESENCE

Byline: Julie Naughton

NEW YORK — Ulta, a chain beauty retailer based in Romeoville, Ill., said Thursday it had entered into a partnership with Online Retail Partners LLC, based here, to create an e-tail and interactive information Web site.
Under the terms of the agreement, Online Retail Partners will make a $15 million investment in a new, independent company that will create and develop Ulta.com, which is slated to launch by the end of the first quarter of 2000.
Ulta and Online Retail Partners will jointly own the new company, which will be run by a chief executive officer responsible for only the Internet business.
The partners are currently searching for a ceo for the Web site.
Both sides declined to comment on projected first-year sales or the ownership each holds in the new entity.
The site is still in the planning stages, as are the brands that will appear there. But according to Terry Hanson, president and ceo of Ulta, they will likely include mass cosmetics brands such as Max Factor, Revlon and L’Oreal, and prestige cosmetics, skin care, fragrances and beauty accessories.
“We want customers to find the same type of experience online as they do when they visit one of our stores, and that means a lot of variety,” said Hanson.
The company operates 74 stores in major metropolitan areas, each with a 2,000-square-foot full-service salon and an 8,500-square-foot retail space offering prestige fragrances, prestige and mass cosmetics and skin care, professional hair care products and beauty accessories.
“We currently carry more than 17,000 stockkeeping units in each of our stores, and we hope to bring a significant number of those sku’s to the Web site,” he said.
Hanson said the site would not include — at least initially — the salon hair care brands the Ulta stores carry, although trends emanating from the chain’s salons will be featured on the site.
According to Hanson, the site will have a number of interactive features.
It will give cosmetics shoppers access to beauty experts and allow them to interact with one another.
The Web site will also build on Ulta’s existing Beauty Club loyalty rewards program — with a base of two million customers — by offering purchasing incentives for loyal online customers.
According to John Kristie, chief technology officer and a co-founder of Online Retail Partners, the firm assists branded retailers in establishing e-tailing sites, providing capital, technology, management, marketing, business development and distribution-fulfillment capabilities.
“Our function, essentially, is to incubate dot-com companies,” said Kristie.
“The assets we bring are capital, shared marketing and business development help, and we look to the retailer to provide their brand name, their relationships with vendors and products. Both of us then provide services to a new entity,” he added.
Ulta is the third retailer to enter into such an agreement with Online Retail Partners, which was formed in May. The others are Zany Brainy, a children’s specialty toy retailer, and Dick’s Sporting Goods, a 80-store chain selling premium branded sporting goods in the Midwest, mid-Atlantic and Northeast regions of the U.S.
The three companies associated with Online Retail Partners will share customer information and client databases, said Kristie.
Ulta.com isn’t Ulta’s first venture into cyberspace. In June, Ulta teamed up with outside venture capitalists to form Ulta Internet Holdings, which then purchased an equity investment stake — the size of which could not be learned — in Jasmin.com., the online fragrance retailer.
Ulta now provides warehousing, distribution and fulfillment services for Jasmin.com’s online fragrance business.

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