Ulta Beauty has released more details about its expansion into Mexico.
Via a joint venture with Grupo Axo, the first store in Mexico opened on Aug. 21 at Antara Fashion Hall in Mexico City, followed by Galerías Metepec on Aug. 30.
“Entering Mexico represents a bold and exciting step for Ulta Beauty as we bring our unparalleled assortment and inclusive shopping experience to beauty lovers in this significant international market,” said Kecia Steelman, president and chief executive officer of Ulta Beauty.
The move will bring 35 brands to Mexico for the first time, including Isima by Shakira, Peach & Lily, Orebella, Ulta Beauty Collection, Morphe, Bubble, about-face, Ouai, Half Magic and Kitsch. They will be displayed alongside Mexican brands like AHAL, AloeVida, Bailando Juntos by Yuya, Sarelly Creativo Lab by Anna Sarelly and more.
“Mexico is home to one of the world’s most dynamic and passionate beauty communities,” said Andrés Gómez, CEO and chairman of the board at Grupo Axo. “We are proud to partner with Ulta Beauty to bring their one-of-a-kind retail experience to our market. Together, we look forward to inspiring guests with a fresh vision of beauty, powered by community, service, and innovation.”
Ulta Beauty Mexico plans to open several stores across the country in 2025 in Altacia, León; Antara, Mexico City; Fórum Tlaquepaque, Guadalajara; Galerías Guadalajara, Guadalajara; Galerías Metepec, State of Mexico; Península Tijuana, Tijuana; Plaza Fiesta San Agustín Monterrey, Monterrey; Plaza Satélite, State of Mexico; and Vía Viva, Guadalajara.
Ulta is also expanding into the Middle East and most recently gained a foothold in the U.K. via its acquisition of Space NK.
When asked about further distribution opportunities in the U.S. during a Goldman Sachs conference Thursday, Steelman said: “There is still opportunity for us to continue to grow in the United States. There are multiple ways that we can grow with prototype. You have got our small store format, which is about 5,000 square feet. I’ve shared that about 20 percent of our new stores this year will be in that type of a prototype. There are outlet centers, which is kind of a newer foray for us that we’re liking. We’re putting traditional stores in the outlet centers, not like we’re doing a reduction in price in these locations, but the guest is really responding well. And then there’s our everyday prototype of a 10,000-square-foot store.”
Nevertheless, the new target of store openings is closer to 50- to 60-a-year range, lower than the 200 range previously. “The driver of that is purely that we’re being very thoughtful of our capex and our opex expense and our investment. And a lot of the prime real estate locations, the vacancy rates have come down from the landlords. So hence your tenure lock-in could be potentially higher, so we want to be really thoughtful when we’re putting in a new store and when we’re signing on these longer lease-type terms.”
On why the end of its partnership with Target Corp. won’t necessarily translate into the need to open more Ulta Beauty stores, she explained: “That doesn’t make much sense because of two things. Number one, it’s not like we had a full store in the Target locations. It was a 1,000-square-feet highly curated assortment. It was more of that infill shopping experience. When you look at the halo impact of like where we have stores that are located within Target, I’ve got plenty of stores where I could pick up that volume in existing store format. So, there is not that need to all of a sudden be more aggressive and open stores because we are moving away from the partnership with Target.”
