Another giant cosmetics brand closing store unexpectedly

It's a pretty difficult time to be a retailer, no matter what corner of the industry you're in. 

From the largest corporate incumbents down to the smallest mom and pop shops, fickle consumer tastes and macroeconomic headwinds have kept operators on their toes. 

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Some have been flattened altogether. 

If the past five or so years have taught us anything, it's that anything can happen in retail. 

What we might have thought were ironclad business models have since become ghost towns or relics of the past.

And what has stepped into their place is a major transformation in how we transact on a daily basis now. 

Take, for instance, how you might shop for a family member's birthday party.

Most of your supplies would likely come from either a big box store, like Target or Walmart, or online from Amazon. 

You likely wouldn't even think to stop in at a niche party supplier, since everything from balloons to cake is far more accessible during one trip to a large store. 

So stores like Party City have gone under, folding under the pressure of the growth of online business and easier access points.

Beauty retailers changing

One of the most fascinating corners of the retail industry to study is the beauty market. 

This is partly because it's full of contradictions.

For example, the lipstick effect posits that when the economy takes a nosedive, customers actually tend to make more small, one-off purchases on things like cosmetics. 

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The idea is that even when they're watching their budgets and putting off larger purchases, people who purchase cosmetics still find it possible to splurge on the little things (like lipstick and eyeshadow). 

Another contradiction is the beauty retail model. 

While most stores have transitioned to an online-first model, beauty retailers like Sephora and Ulta have held strong using the brick and mortar model, as most customers enjoy swatching and sampling cosmetics before buying them. 

Large beauty retailer closing store

But this isn't a fail-proof model. 

Ulta  (ULTA) , the large beauty retailer based out of Bolingbrook, Ill., saw net sales slip by nearly 2%, partly as it loses ground to Sephora. 

And that's particularly true among young spenders. 

Piper Sandler's 2025 Taking Stock With Teens survey revealed that Ulta lost share to Sephora, which is now the top favorite beauty retail destination among the younger demo. 

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And now, Ulta is shuttering a store in Chicago, Ill. at the South Loop Roosevelt Collection Shops.

The store, which is located near other retail destinations like Old Navy and Target, has been in operation for 12 years. 

Its last day will be June 14, 2025. 

In the meantime, it's offering sales of up to 50% off select merchandise.

Ulta has not supplied a reason for the closure, though the beauty retailer has mentioned concerns about popularity in recent earnings calls. 

"Our in-store presentation and guest experience today are not as strong as we would like," CEO Kecia Steelman said during the most recent February earnings call, indicating Ulta has struggled against competitors like Sephora as demand for viral new beauty products and quick shipping are of paramount importance to customers.

The retailer is working to turn things around, indicating 2025 will be a year of transition.

Comps were up 1.5% in its most recent quarter.