Will CEO transition look good on Ulta Beauty?
Ulta Beauty is getting ready to give its c-suite a new management look. The nation’s largest beauty retailer announced yesterday that CEO Mary Dillon will be stepping down from that spot in June and turning over leadership of the chain to Dave Kimbell, currently president of Ulta.
Ms. Dillon, who has led Ulta for eight years, credited the retailer’s success during her tenure to the dedicated associates that serve their customers. “Our strategies, culture and continuous innovation have strengthened our business model, ensuring we are well-positioned to continue leading the industry,” she said.
While she may be stepping down, Ms. Dillon will remain involved in Ulta’s success as its executive chair.
Mr. Kimbell, described as “a results-driven, inclusive leader,” has been on Ms. Dillon’s team since 2014 when he joined Ulta as its chief marketing officer. A year later he was named chief merchandising and marketing officer before being elevated to the president role in 2019.
“Our dynamic business plays a unique and important role in the beauty industry and in our guests’ lives — and we are committed to continue operating with deep respect for that role while innovating and winning together,” he said.
Mr. Kimbell will certainly have big shoes to fill as Ulta’s CEO. The chain saw its market capitalization more than triple to over $!8 billion during Ms. Dillon’s term. She has received praise for creating a successful and inclusive culture at the retailer that has more than doubled its store count and loyalty program members and significantly improved its digital capabilities during her tenure.
Last year proved a challenging one for Ulta. The chain reported a net sales decrease of 16.8 percent, with same-store comps down 17.9 percent. Ulta also took a hit on margins. Its gross profit came in at 31.7 percent in 2020, compared to 36.2 percent the year before.
The chain did, however, finish the fourth quarter and the year on a high note as it cut its net sales decrease to 4.6 percent and announced a deal that will place Ulta Beauty at Target shops inside hundreds of the mass merchandiser’s stores in the coming years. More than 100 will open in 2021.
- Ulta Beauty Announces CEO Transition – Ulta Beauty
- Ulta Beauty Announces Fourth Quarter Fiscal 2020 Results – Ulta Beauty
- Will Ulta shops turn Target into a beauty destination? – RetailWire
DISCUSSION QUESTIONS: What do you think are the reasons that Ulta Beauty has done so well under Mary Dillon for the eight years she has led the company? How confident are you that Dave Kimbell will keep the chain moving in an upward direction?
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10 Comments on "Will CEO transition look good on Ulta Beauty?"
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Principal, KIZER & BENDER Speaking
My job is to look at retail from the consumer’s point of view. Other than the fact that I admire her, I don’t know much about Mary Dillon, but I do know a lot about Ulta.
The sales floors are open, well lit, and product is attractively displayed and easy to shop. The store associates are friendly, knowledgeable and happy to help shoppers. And it’s Ultamate loyalty program is one of the best in the industry.
So why do I think Ulta has done so well under the guidance of Mary Dillon? Because she’s smart and intuitive and knows her customer. I’d say Dave Kimbell has some big shoes to fill, but he has been an integral part of the company so it will be an easy transition.
Contributing Editor, RetailWire; Founder and CEO, Vision First
While these are big shoes to fill, Dave Kimbell has had a big role in Ulta’s success to-date. I expect him to evaluate market conditions and continue to deliver the right products, experience and tone that customers love and expect.
Director, Retail Market Insights, Aptos
Ms. Dillon’s success can be attributed to her espousing a radical theory of successful retailing: take care of your associates, take care of your customers, create assortments that respond to your local customers’ preferences, and offer integrated omnichannel experiences with a heavy emphasis on the store as a critical part of the journey. Radical, I know, but apparently it has worked for Ulta.
Co-founder, RSR Research
Mary Dillon has done a great job with a company in serious growth mode. Hired a great CIO, grew the chain, made the most of being “hot” but it has struck me lately that the company has too many stores. Way too many.
I think the company is moving from growth mode to maturity, and a new CEO who is more of a steady state person will likely succeed. Markets are not infinite.
Associate Professor, Fashion Institute of Technology
Mary Dillon leads through servant leadership, always putting employees and customers at the center of every decision. She makes strong business decisions while leading with empathy. She has made Ulta Beauty a household name and expanded the loyalty program significantly since being CEO. Dave Kimbell will make an excellent replacement and has been succession-planned for the past seven years so an understanding of the customer and culture has already been established. His former background with PepsiCo, Seventh Generation, and U.S. Cellular will be beneficial in his new role!
CEO, President- American Retail Consultants
A great CEO transition requires the support of the board, the previous CEO, and empowerment from the top down. Dave Kembell will have all of this, plus he has been working as president within the organization. All of this spells out success for Dave Kembell and the entire organization.
Retail Industry Strategy, Esri
Ulta has been one of the superstars in retail over the last several years. In particular Ulta has done a great job in the area of unified commerce, connecting with their customers across multiple channels in a relevant and genuine way. Their stores are fantastic, clean, easy to shop, and feature value added services. I also really like their partnership with similar brands to amplify their value proposition and reach new customers. Congratulations and kudos are in order.
Managing Director, GlobalData
Under Mary Dillon, Ulta has outperformed across so many different metrics and has grown into a powerhouse of a retailer. A lot of that is down to her leadership style which is extremely open and receptive. She genuinely cares about customers and associates and actively listens to them. That, as well as hard numbers and spreadsheets, informs her strategy – and it has worked. In my opinion, Ulta is a retail case study that should be highlighted and spoken about far more.
As for Dave Kimbell, he has been a part of Ulta’s success too and this transition has been in planning for some time. He is a safe pair of hands and will, in my view, continue the style and policies that have helped Ulta succeed.
Founder, CEO, Black Monk Consulting
Ulta is a classic example of how doing basic retail block and tackling – starting with a relentless knowledge of, and focus on, the consumer and improving their in-store experience – correctly allows you to be innovative and grow. Kimbell has been on board long enough that the transition shouldn’t be all that dramatic, but only time will tell.
I think growth will continue at least for another few years before maturity hits. They have the deal with Target which I think will be significant growth. The major cosmetic brands are losing (or in the case of bankrupt Belk, some of the cosmetic brands are pulling out on their own) distribution locations as department stores close and Ulta carries many of those lines the department stores carried.