Expansionist Aspirations

Indeed, Ulta Beauty has long eyed international expansion, but the company was only too aware that establishing its presence outside the U.S. from scratch could be slow and expensive. In Space NK, founded with a store in London’s Covent Garden in 1993 by Nicky Kinnaird, Ulta Beauty inherits a current base of 83 U.K. and Ireland stores, with 10 more slated to open, plus a strong online presence offering an immediate and scalable platform.

At the same time, the two brands neatly complement each other. Space NK has built its reputation on curating innovative, primarily high-end labels and offers a blend of global and indie products. That caché has largely eluded Ulta Beauty, despite all its success with a primarily mass‑market portfolio. Space NK has also achieved a strong brand following among younger shoppers, giving Ulta Beauty access to a new demographic.

Space NK Niche

Indeed, Space NK excels in executing hyper-local, personalized in-store experiences alongside digital integration, and Ulta Beauty will no doubt seek any operational and experiential learnings it can import from its new subsidiary. For its part, Space NK will be allowed to continue operating independently under its existing management with CEO Andy Lightfoot and maintain its brand and customer experience ethos.

That’s good news for shoppers, as Space NK has proven that it can excel at high-touch, localized selling, and operates stores in prominent locations like Battersea Power Station in London and will soon open on Oxford Street adjacent to the new IKEA urban store at Oxford Circus. Many of Space NK’s stores are located in smaller, upscale towns around the U.K. or in upscale London postcodes. With its reputation as a curator of products and services. Space NK also has strong relationships with some of beauty’s coolest up-and-coming brands.

Buying Space NK gives Ulta Beauty immediate access to the U.K. beauty community, plus an established distribution network and rich customer data. In reciprocity, some smaller brands from the U.K. might get the chance to launch in the U.S. through the deal, giving Ulta Beauty a point of differentiation and some much-needed international credibility.

Integrating supply chains, ecommerce, data analytics and brand relationships positions both firms to scale faster, with Space NK benefiting from Ulta Beauty’s far deeper pockets. Ulta Beauty will gain instant reach with new consumers, and its well-oiled operations will support Space NK’s store rollout, loyalty program and ecommerce growth. Space NK’s personalization tools could feed back to improve Ulta Beauty’s domestic offerings, helping reinvigorate its underwhelming collaboration with Target.

Ulta Beauty Goes Global

Ulta Beauty President and CEO Kecia Steelman, who was only appointed to the top job in January 2025, has attempted to reinvigorate the beauty giant by launching a strategy emphasizing U.S. consolidation, an experiential in-store focus, plus international growth.

Meantime rumors that Space NK was courting buyers had gathered pace for more than a year and the company had already refocused its operations, selling off its U.S. operations to distribution firm PCA Companies in 2024, while also investing in new stores in the U.K. Steelman cited Space NK’s brand strength and established team, plus Ulta Beauty’s need to enter the region through an established banner, as she stressed that the company was eager to learn from Space NK’s success in the U.K. as it seeks formulas to expand its international presence.

And she has wasted little time in widening its global scope, following a joint venture with Grupo Axo in Mexico slated to launch in August and a licensing agreement with franchise giant Alshaya Group in the Middle East, with stores expected to open in Dubai and Kuwait by the end of the year. The acquisition of Space NK could be used as a platform into continental Europe, tapping adjacent markets once U.K. integration is established.

Ulta Beauty also plans to launch an Amazon-style marketplace this year despite a cooling market. Indie brands – not traditionally Ulta Beauty’s strong suit – might just attract shoppers into its stores if it can leverage Space NK’s prestige to plug an important gap. “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 U.K. market with a successful and growing brand. Along with our initiatives in Mexico and the Middle East, we are creating a broader platform for Ulta Beauty to unlock long-term, profitable growth,” said Steelman at the announcement.

Ulta Beauty Reset

The acquisition also comes in the midst of a major management shift: Steelman, previously President and Chief Operating Officer, took the top CEO job; Lauren Brindley, formerly of the U.K.’s Revolution Beauty was appointed Chief Merchandising and Digital Officer; Kelly Mahoney was promoted to Chief Marketing Officer; Amiee Bayer-Thomas took the newly-created role of Chief Retail Officer; and Chris Lialos recently took over from Paula Oyibo as CFO.

The management shakeup came after slowing market share gains, prompting Steelman to announce in April that the retailer had paused opening new shop-in-shops in Target. That deal, inked in 2020, has seemingly failed to deliver on expected revenues, especially compared with the success of Sephora within Kohl’s. Despite rolling out in over 600 Target stores, both retailers announced that, for the time being, they are focusing on leveraging those locations rather than expanding them any further.

Fiscal Red Flags

Ulta Beauty is the largest specialty U.S. beauty retailer and operates 1,451 retail stores across 50 states. But for its fiscal year, it is expecting at best 1.5 percent sales growth. That is a warning flag reflecting tightening consumer belts and supply chain disruptions as a result of the on/off U.S. trade tariffs. Steelman’s recent moves are an attempt to kickstart growth and increase its competitive advantage against rivals Sephora and Amazon.

Despite its small geographical footprint, the U.K. is a pivotal beauty market, and Ulta Beauty’s choice to buy an existing operation mirrors the re-entry of Sephora into the U.K. through the acquisition of local e-tailer Feelunique in 2023 after a 17-year absence, following its ignominious exit in 2005, having opened just six stores in five years.

Space NK is still growing at pace. Last year, its earnings increased 34 percent to $265 million, powered by growth in its under-25 consumer cohort, the retailer’s fastest-growing demographic. Even with the return of Sephora in the U.K., and the growth of Boots, the domestic Walgreens-owned chain, which has also pivoted hard into beauty, Space NK has retained customers with its loyalty program and differentiated offer.

Buying an 83-strong chain, which is minuscule to the point that Ulta Beauty’s stock price hardly budged a notch on the news, is more than the sum of its parts. Space NK could be the springboard for Ulta Beauty to take on the likes of Sephora, Boots, Amazon and the slew of expansionist Korean brands. The question is how far it can leap.