We look at company decisions, trends, challenges and successes through the lens of their stock price.
Our first stop: Ulta Beauty.
Makeup isn’t going anywhere. And no, I don’t mean this like I found the perfect matte foundation that isn’t going to sweat off your face. I’m talking about the $532 billion cosmetic industry.
Makeup is a big business, so much so that economists have given the industry’s resiliency its own name — the lipstick effect — which is just a way of saying that a product maintains or even increases in demand during a downtrend.
When the average woman spends around $300,000 on makeup in her life for everything from a job interview, a date, to a night out with friends, you’re going to want to make the process of getting it as easy as possible. That’s why a lot of women are getting it from Ulta Beauty. Ulta caters to the everyday women, the one who doesn’t have time to take a trip to the Sephora in the mall or travel to one of the four Glossier stores in the world.
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So, how did this small cosmetics company founded by two pharmacy executives in Illinois grow to dominate social media and the global cosmetic industry? How did the company bounce back after the 2008 recession (a year after the company went public in 2007)? What have they done to take advantage of the rise of online influencers and e-commerce? And why is their customer base vehemently loyal?
Check out our new video series, Trendline, and find out: