Ulta Beauty halts expansion into Canada to focus on U.S. operations, online shopping

BOLINGBROOK, Ill. — A leading U.S. cosmetics chain has halted expansion plans into Canada, saying it will instead focus on its U.S. operations and "omnichannel capabilities" including online shopping.

Ulta Beauty Inc. unveiled plans in May 2019 to become a "global beauty retailer" starting with a launch into Canada’s competitive cosmetics market.

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But in a filing with the U.S. Securities and Exchange Commission on Wednesday, the Illinois-based retailer said it was scrapping its foray north as a result of the "current operating environment."

"The company has decided at this time to prioritize growth of its U.S. operations and is suspending its planned expansion to Canada," the company said.

Ulta said halting those plans will cost US$55 million to US$65 million as a result of lease obligations for a small number of stores and early-stage infrastructure buildout.

Still, the beauty retailer said it "continues to believe international markets provide a long-term growth opportunity for the company."

Meanwhile, Ulta said it has "identified investment opportunities to support continued profitable growth in the U.S."

Ulta, which sells products including cosmetics, skincare, fragrance and hair care, said it plans to invest in customer "experience and discovery," increased loyalty and personalization efforts and new U.S. store openings.

The company said is also working on its "omnichannel capabilities," which focuses on improving customer experiences whether online or from brick-and-mortar stores.

It’s something established players in Canada’s competitive beauty market are also focused on.

Sephora, a personal care and beauty store chain, announced Thursday plans to partner with delivery firm Instacart to offer same-day delivery from nearly all locations across North America.

Carolyn Bojanowski, senior vice-president and general manager of e-commerce for Sephora, said it will provide a more seamless online shopping experience.

She said now more than ever customers are seeking "ease and convenience."

This report by The Canadian Press was first published Sept. 24, 2020.

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