Our Company
We were founded in 1990 as a discount beauty retailer at a time when prestige, mass and salon products were sold through distinct channels—department stores for prestige products, drug stores and mass merchandisers for mass products, and salons and authorized retail outlets for professional hair care products. After extensive research, we recognized an opportunity to better satisfy how a woman wanted to shop for beauty products, which led to what we believe to be our unique combination of beauty superstore and specialty store attributes. We believe our strategy provides us with the competitive advantages that have contributed to our strong financial performance.
Today, ULTA is the largest beauty retailer that provides one-stop shopping for prestige, mass and salon products and salon services in the United States. We focus on providing affordable indulgence to our customers by combining the product breadth, value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer. Key aspects of our business include:
One-Stop Shopping: We offer a unique combination of over 20,000 prestige and mass beauty products across the categories of cosmetics, fragrance, haircare, skincare, bath and body products and salon styling tools, as well as salon haircare products. We also offer a full-service salon in all of our stores.
Our Value Proposition: We focus on delivering a compelling value proposition to our customers. For example, we run frequent promotions and gift certificates for our mass brands, gift-with-purchase offers and multi-product gift sets for our prestige brands, and a comprehensive customer loyalty program.
An Off-Mall Location: ULTA stores are conveniently located in high-traffic, off-mall locations, and our typical store is approximately 10,000 square feet, including a salon of approximately 950 square feet. As of July 30, 2011, we operate 415 stores in 42 states.
Our Competitive Strengths These competitive strengths have differentiated us from our competitors and are critical to our success:
- Differentiated merchandising strategy with broad appeal – we believe our broad selection of merchandise across categories, price points and brands offers a unique shopping experience for our customers.
- Our unique customer experience – we combine the value and convenience of a beauty superstore with the distinctive environment and experience of a specialty retailer. We cater to the woman who loves to indulge in shopping for beauty products as well as the woman who is time constrained.
- Retail format poised to benefit from shifting channel dynamics – we are capitalizing on shifting trends in how manufacturers distribute and customers purchase beauty products by offering an off-mall, service-oriented specialty retail concept with a comprehensive product mix across categories and price points.
- Loyal and active customer base – we have almost eight million customer loyalty program members. We utilize this valuable proprietary database to drive traffic, better understand our customers’ purchasing patterns and support new store site selection.
- Strong vendor relationships across product categories – we have strong, active relationships with over 300 vendors, which span the three distinct beauty categories of prestige, mass and salon. The scope and extent of these relationships have taken years to develop and create a significant impediment for other retailers to replicate our model.
- Experienced management team – we have an experienced management team with extensive retail experience that brings a creative merchandising approach and a disciplined operating philosophy to our business.
Growth Strategy We intend to expand our presence as a leading retailer of beauty products and salon services by:
- Growing our store base to over 1,000 stores in the United States
- Increasing our sales and profitability by expanding our product, brand and service offerings
- Enhancing our successful loyalty program
- Broadening our marketing channels
- Enhancing and expanding our e-commerce business
- Improving our profitability by leveraging our fixed costs
