Target and Ulta are ending their shop-in-shop deal after employees flagged cracks

Target and Ulta Beauty announced their shop-in-shop partnership in 2021 to grow Ulta's reach and take Target into prestige cosmetics; Target went on to open 610 Ulta shops inside its stores. In April 2025, Ulta's president and CEO Kecia Steelman told a conference the two would 'pause' the shops' expansion, looking to 'leverage the learnings' and create 'even greater value'.

Weeks before that pause, Target employees had taken to Reddit to share red flags about the tie-up: shoplifting, understaffing, foot-traffic cannibalization and an underwhelming customer experience. After the ending was announced, Redditors in r/Ulta and r/Target — many claiming to be current or former employees — echoed the same sentiments; one three-year shop veteran wrote they were 'not surprised at all'.

On August 18, 2025 the retailers announced they had 'mutually agreed' to end the partnership when the current agreement expires in August 2026, continuing to operate online and in stores until then. Target's chief commercial officer Rick Gomez said the company was 'proud of our shared success' with Ulta and remains committed to the beauty experience consumers expect from Target.

Target had already been growing its beauty assortment beyond the Ulta shops — launching 2,000 products and 50 new brands in February and adding beauty items to its front-of-store Bullseye's Playground. The end was another blow to Target, which had seen six straight months of foot-traffic declines since backtracking on DEI efforts in January, while Ulta's own turnaround plan was lifting sales.

610 Ulta shop-in-shops opened since 2021 will be wound down when the agreement expires in August 2026; Target rebuilding its own beauty assortment instead.

Store-level problems — shoplifting and understaffing — left the shops underpowered, per the employees who worked in them.

Cannibalized foot traffic meant the beauty shops pulled shoppers from the rest of the store rather than adding to it.

Both partners developed substitutes: Target built its own beauty assortment while Ulta's turnaround reduced its need for Target's reach.

A shop-in-shop must earn its floor space for both brands; when store-level economics sour — theft, staffing, cannibalized traffic — scale alone will not save it.

The shops wind down through August 2026 under the expiring agreement. Target continues building first-party beauty with its own launches; Ulta keeps the benefit of brand exposure gained since 2021 but loses its fastest route into Target's roughly 2,000-store footprint.