ULTA EYES NEW JERSEY’S BEAUTY POTENTIAL

Byline: Faye Brookman

PRINCETON, N.J. — More than 100 women streamed into beauty purveyor Ulta’s first store in central New Jersey last Friday.
Squeals were heard at the door as shoppers reached into a box held by a store associate and pulled out gift certificates ranging from $5 to $100. The visitors were immediately handed a basket and then loaded with free samples including OPI nail color and Exuviance skin cream. There were also demonstrations by several vendors and complimentary salon services of either a paraffin dip or a change of nail color.
Within an hour of the opening the checkout line snaked around the cash resister. That’s just the vision Lyn Kirby, Ulta’s chief executive officer, had in mind as she toured the store just days before the debut. “It will be a madhouse here on Friday,” said Kirby as she walked the store.
Her confidence stems from the fact that Ulta has matured into a 102-store operation with a format combining the best of mass retailing with prestige products, as well as salon services and salon products. Company sales exceeded $100 million in 2001, and the retailer just came off a holiday season where comp-store sales rose 13 percent in December including a 5 percent jump in fragrances. That’s in comparison to the zero gains in fragrances for department stores and minor increases for drugstores.
Ulta has indeed come far from its roots as a slightly upscale drugstore into a beauty mecca. Most shoppers in New Jersey said they had never seen anything like it. Although they were familiar with beauty supply stores, they liked the one-stop approach to finding an assortment of beauty needs.
The 10,200-square-foot store here is also in a real estate property that Kirby said is just what Ulta craves. Situated off of a bustling major highway, Route 1, the power strip center is also home to Kohl’s and Wegmans.
Ulta currently operates in markets such as Chicago, Minneapolis, Las Vegas, Phoenix and Atlanta. Other New Jersey sites will open in the next few months in Morristown and Edgewater. The Edgewater store will feature Ulta’s next design type, called Level 5. “We’re really going to do more with the salon area and really open it up,” said Kirby, who wouldn’t expand on the new concept. Elements of Level 5, however, are already in an Ulta store in Fort Wayne, Ind. In addition to bringing the salon services into the open, the store has more interactive merchandising displays. Ulta unveiled 13 new stores last year with plans for 18 more in 2002.
Kirby hopes the proximity to Manhattan, especially with the store set to open in Edgewater, will help explain Ulta’s philosophy to suppliers who aren’t familiar with the company. There are still brands Ulta’s management would like to add to the mix. However, there’s not too much shoppers can’t find in the 18,000 stockkeeping units packed into the store.
The store here is what Ulta calls Level 4. The entrance features a space age fixture housing the firm’s private label cosmetics. The salon is in the back, but visible from the door. The first few aisles feature the prestige brands Ulta sells such as Tony & Tina, Pupa, Trucco, Elizabeth Arden, Girl, Borghese and a fairly new line called Zhen. There are also premier skin care brands such as Murad. Off to one side are mass beauty lines such as L’Oreal and Revlon. The other side of the store features hair care appliances, mass hair products and hair accessories. “One of the things we really do well,” said Kirby, “is display hair care appliances. We have a personal care display area where all products are hooked up so people can try them out.”
The rear of the store is where salon hair products are merchandised so that stylists can roam throughout the department and give advice. The store has everything from Matrix and Artec to TIGI Bed Head and Sebastian.
Near the front of the store is an area where Ulta displays wellness items. “This is really an emerging category for us — the yoga products, Pilates, paraffin spas, things that soothe,” said Kirby.
At the other side is the fragrance wall where just about any prestige or mass fragrance can be found. For the opening, Ulta promoted Michael Kors eau de parfum spray, 1.7 ounce for $60, Ralph Lauren’s Romance eau de parfum 1.7-oz. eau de parfum for $49.50 and Truth by Calvin Klein at $44 for a 1.7-oz. eau de parfum spray.
Ulta’s older stores, said Kirby, are being remodeled to reflect the fresh look at this unit. According to Kirby, Ulta uses information from its millions of beauty club members. Ulta has been one of only a handful of retailers to truly maximize information gleaned from customer loyalty programs, sources said. “The changes we make, we make for our bull’s-eye customer who is in the 31 to 40 age group,” said Kirby. “That is why we’ve expanded wellness. Our customers ask for it.” It is also why Ulta abandoned a few other concepts such as experimenting with small restaurants or cyber-cafes.
While Ulta is the only retailer in the center combining salon and beauty, it does face steep competition from the beauty presence at Wegmans and Target. But, as customers ran around scooping up merchandise during the grand opening, it was apparent the Ulta here has hit its mark.

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