Retail Theft and Shrink Concerns Undermine Premium Beauty Collaboration
Target Corporation and Ulta Beauty have decided to terminate their multi-year retail partnership, citing persistent inventory losses due to rampant shoplifting and organized retail crime.
The collaboration, launched in 2021, brought Ulta’s prestige beauty brands into Target stores across the U.S., offering shoppers a seamless, high-end cosmetics experience within a mass retail environment. The in-store concept featured dedicated Ulta spaces staffed by trained beauty advisors and linked both companies’ loyalty programs, creating a compelling omnichannel value proposition.
However, the initiative has been plagued by high shrink rates, particularly in locations with elevated crime rates. According to internal sources, some stores reported monthly theft-related losses exceeding $10,000, primarily in high-value cosmetics and skincare products. Despite increased investment in asset protection, both companies struggled to curb the trend.
The decision to unwind the partnership is a setback for Target’s beauty category, one of the few high-margin growth areas in recent years. It also highlights the broader retail industry's vulnerability to theft-driven shrink, which has become a major line item on earnings calls and investor briefings across the sector.
For Ulta Beauty, the separation allows the brand to refocus on its standalone store network and direct-to-consumer channels. Executives from both companies expressed mutual appreciation and indicated openness to future collaborations under different market conditions.
