Yesterday I did my research history on Lululemon Athletica which is a company that has grown leaps and bounds over the last few years. Today I will follow that up with another company focused on females. This company too has grown like crazy over the last few years. In fact, a $10,000 investment in Ulta Salon & Cosmetics at around $4 a share in March of 2009 would be worth approximately $205,000 today. This kind of gain calls for a little bit of extra research on this beauty salon & cosmetics company. For more information on other retail stories make sure to check out this page: The History of Retail
Ulta was founded in 1990 when women had very few choices when it came to prestige, mass and salon products. The only options were department stores for prestige products, drug stores and mass merchandisers for mass products and salons and authorized retailers for professional hair care products. Rather than having to go to three or four different locations, Ulta felt as if female shoppers would benefit from a “one stop shop” for cosmetic and salon products. Today Ulta offers over 20,000 products and a salon in each retail location.
One of the more interesting strategies that Ulta used from the beginning was the off the mal location. Rather than putting cosmetic stores in malls, at high rent costs, the company decided on other locations. When visiting an Ulta today most customers notice they are near other brick and mortar retailers like Best Buy, Dicks Sporting Goods, Bed, Bath and Beyond and HHGregg. This strategy has worked very well as it allows the average store to offer 10,000 square feet of shopping with the salon usually taking up about 950 square feet.
On Thursday, October 25th, 2007 the company IPO’d on the NASDAQ. The offer was priced at $18 a share but the stock rose to $29.25 on its first day of trading. Like most stocks in 2008 and early 2009, Ulta dropped like a rock. In March of 2009, the stock reached an all time low of $4.40 a share. For those who had money invested in the stock market at this time you know that this was the lowest level after the financial crisis. Since then, Ulta has seen their stock price soar. In the last three years the stock has grown over 1900% to $82 a share as of February 19th, 2012.
When the company IPO’d back in 2007 it operated 211 stores in 26 states. Today the company operates 449 stores in 43 states. One of their expansion goals is to operate 1000 stores in the United States. This would mean that the company would more than double their current exposure which, in turn, should increase profits. That being said, remember that some companies try to grow too quickly and they end up over extending themselves. Investors are very happy with the growth of Ulta as the stock prices has moved from $34 in the beginning of 2011 to over $82 a share in February 2012 (a 141% increase). This is almost unparalleled on the NYSE or NASDAQ as the overall market has been flat during that same time frame. Both Lululemon Athletica and Ulta have outperformed the overall stock market by finding a niche market and offering quality products and great service.
Here was the Ulta Symbol trademarked in 2000:
The symbol then changed in 2007. Here are the two new Ulta Symbols: