Ulta Beauty Is Giving Sephora A Run For Its Money With The Opening Of A New Store

The retailer's first Manhattan location is among 100 plus locations to be opened this year, the company told BuzzFeed News. It plans to open another 100 stores in 2018.

Ulta Beauty is creeping into new territory: the Big Apple. The beauty retailer announced the grand opening of its first store in Manhattan, which is on the affluent Upper East Side — and a stone's throw from a Sephora.

Ulta Beauty, which sells a broader range of brands than Sephora and has a wider price range, has until this week kept its retail presence in the outer boroughs of New York City and in suburbs across the country. The company, which says it is the largest beauty retailer in the country, is in expansion mode: It plans to open 100 new stores by the end of the year and 100 more stores in 2018, which would bring its total stores to roughly 1,200 across the US.

Ulta Beauty is known for its airy suburban shopping experience and for carrying mass-market brands like Maybelline as well as the higher-end ones that Sephora sells. The move into the Upper East Side is meant to attract new consumers and put the brand into more direct competition with Sephora for the urban beauty enthusiast.

"Manhattan is just part of that overall strategy," Dave Kimbell, Chief Merchandising & Marketing Officer of Ulta Beauty, told BuzzFeed News. "With this first Manhattan location, we think it’ll reach a new consumer and deliver what’s really unique about Ulta Beauty for the first time, which we believe will be well received."

Ulta Beauty's store in Manhattan includes 20,000 beauty products from more than 500 brands across all categories and price points. The store has a hair salon, Benefit Brow Bar, Dermalogica Skin Bar, M.A.C. makeup applications and lessons, and Skin Laundry facial treatments.

The new store is over 10,000 square feet and sits on the corner of 86th Street and 3rd Avenue — less than a block from a Sephora on 86th Street and Lexington Avenue.

Their close physical proximity in the center of one of the country's biggest cities underscores the growing competition between the top specialty retail stores, which are not only taking makeup sales from department stores, but competing with each other for a larger cut of the US beauty market.

The beauty market is currently valued at $54.8 billion, per sales estimates for this year, a gain of 1.4% over 2016, according to a September 2017 report by market research company Mintel. The company predicts that sales will reach $59.3 billion by 2022.

"Simply having a store does not guarantee you success," Simeon Siegel, senior equity analyst with ‎Nomura Securities, told BuzzFeed News. "What that means is the experience of the shop is important."

Ulta Beauty offers a markedly different beauty shopping experience compared with Sephora, industry analysts told BuzzFeed News.

Sephora is an "on mall" brand with an edgy store aesthetic aimed at a fashion-conscious urban consumer, while Ulta Beauty is an airy and bright "off mall" brand that sells a combination of mass and prestige beauty products, plus offering salon services and products, said Siegel.

Both brands are focused on engaging shopping experiences and have highly successful loyalty programs.

"I would point to Ulta as being more accessible," said Diana Smith, associate director of retail and apparel with Mintel. "Longer term, the brand is going to continue to open new stores and looking to expand their presence in more urban areas. I think that’s important for them because that’s where there’s a gap, especially in comparison to Sephora."

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