There’s an abundance of beauty retailers in the UK from high street staples Boots and Superdrug, experience-led retailers Sephora and Space NK, and emerging brands such as Pure Seoul, but is there room for more?
In July, it was revealed that the largest beauty retailer in the US, Ulta Beauty, acquired Space NK from Manzanita Capital.
Though Space NK will act as a subsidiary and continue to operate independently, Ulta Beauty’s chief executive Kecia Steelman said of the acquisition: “We are excited to enter the UK market via the Space NK banner.
“International expansion is an integral part of our Ulta Beauty unleashed plan, and the acquisition of Space NK offers a unique and strategically compelling opportunity to enter the growing UK market with a successful and growing brand.”
Ulta has also chosen Mexico and the Middle East for expansion opportunities and even poached UK-based Revolution Beauty chief executive Lauren Brindley as its new chief merchandising and digital officer.
With the UK identified as a new key market for the US juggernaut, Retail Week looks at why it seeks to enter the busy market, and the competition it faces.
Ulta Beauty and Space NK
Ulta Beauty acquired Space NK in July of this year for an undisclosed sum, although reports suggest it may have exceeded £300m.
Space NK has 83 stores in desired locations, a range of affordable, higher-end, and trendy brands, and annual sales of £196.5m for the year ending March 2024.
While Ulta Beauty aims to tap into this ready-made, credible UK retailer, its success in the US far exceeds this.
As of May, Ulta Beauty operates 1,451 stores across all 50 US states offering over 25,000 products from over 600 brands. Its annual sales for the financial year 2024 reached $11.3bn.
US success and UK dreams
Climbing the ranks to be a behemoth in the US beauty market, there are clearly many things Ulta Beauty is doing very well.
Cheil UK chief executive Chris Camacho says Ulta has cracked the US by combining “scale with soul”.
“It blends prestige and mass seamlessly, powers loyalty through experience, and drives footfall with service-led retail that actually delivers,” he adds.
“More than just selling products, it’s about building ecosystems, and that’s something the UK beauty sector could use more of.”
This is echoed by Aaron Shields, executive director of experience strategy at design and consulting firm Landor, as he points out that Ulta’s one-stop-shop format is “operationally sharp, digitally strong, and their scale delivers”.
However, the growth in the US is plateauing as annual sales only increased by 0.8% in 2024 from 2023.
Shields believes Ulta can learn from how Space NK operates in the UK, with the potential to bring Space NK discovery zones to the US market.
For the UK market, marketing executive and Vexa Beauty founder Sabah Karimi says a competitive advantage for Ulta is its brand positioning and accessibility.
“Bringing together high-end and mass-market products under one-roof, this one-stop-shop format has been hugely successful in the US.”
She credits experiential retail and in-store services such as salons to keeping customers “loyal and engaged” and believes that could work in the UK.
Competing with Sephora
Though not much has been revealed about Ulta Beauty’s plans now that it has a route to the UK, Camacho says the acquisition sends a message.
“They’re not here to blend in, they’re here to reshape the game,” he explains.
The UK beauty and personal care sector made a GDP contribution of £30.4bn to the UK economy in 2024, according to the latest Value of Beauty report.
There is clearly an appetite for beauty, but Ulta will have to compete with the incredibly popular Sephora, who made its return to the UK bricks-and-mortar market in 2023. Sephora now boasts 10 UK stores, with sights set on 20 stores by 2027.
While both Ulta and Sephora have British ambitions, Karimi says Sephora is more “prestige-first” and Ulta has more of an “inclusive approach” with luxury, mid-range, and affordable.
“Ulta can position itself as a complementary player to Sephora,” she explains.
“By not becoming Sephora’s direct competitor, it expands its customer base by filling a gap in the market for consumers who want variety without compromising on experience.”
Camacho shares the same insights, adding that both have different strengths which makes the contrast in the market “more exciting”.
He says there is room for Ulta in the UK, but it needs a bold approach.
“Ulta can evolve from ‘I can get everything here’ to ‘I feel something every time I enter’ – and that’s the growth edge”
“If it fuses Space NK’s credibility with Ulta’s loyalty engine, experiential retail, and digital smarts, it could rewire UK beauty retail entirely. Play it safe, and it risks becoming just another name on the shelf.”
Shields is unsure if Sephora and Ulta will end up as competitors or more complementary retailers.
“This isn’t Ulta chasing Sephora. It’s Ulta hedging with smarter bets,” he says.
“With Space NK, it has bought margin, discovery and emotional cachet – things it can redeploy worldwide. Boots dominates mid-tier, Sephora is back and aiming to win hearts, but Space NK has carved out prestige discovery.”
Space NK has begun tapping into the under-25’s market as it is now its fastest-growing demographic. Shields says this is due to the retailer making people feel “inspired, pampered, elevated and immersed in discovery.”
“That’s why it grows despite the crowd,” he adds.
“Ulta can evolve from ‘I can get everything here’ to ‘I feel something every time I enter’ – and that’s the growth edge.”
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