(Reuters) – Ulta Beauty Inc’s <ULTA.O> shares jumped 10% on Tuesday after the cosmetics store chain signed a long-term deal with Target Corp <TGT.N> to open its own stores at the big box retailer’s locations.
Ulta will have the stores next to Target’s own beauty section, as well as on its e-commerce website, starting next year, with plans to expand to more than hundred locations over time.
“We see this as great traffic driver beginning in 2021 and a partnership that could potentially pave the way for future deals with other retailers/vendors,” Gordon Haskett analyst Chuck Grom said.
Sales of beauty products increased more than 20% in the second quarter, doubling their growth in the previous quarter, Target said in August, as people resume spending on non-essential items following the easing of COVID-19 restrictions.
Ulta has more than 1,200 outlets, while Target operates nearly 1,900 stores.
Target’s shares were up 1.3% at $156.99 in pre-market trading.
(Reporting by Praveen Paramasivam in Bengaluru; Editing by Shounak Dasgupta)