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Sephora Set to Open Hundreds of Mini-Shops within Kohl’s by 2023

Sephora came to an agreement to open hundreds of beauty shops within Kohl’s (NYSE: KSS) stores, similar to rival Ulta Beauty’s partnership with Target. The deal is set to broaden the beauty retailers reach into suburban areas. Kohl’s shares were up 16% amid the news, its highest point since March.

“For us it’s always been a question of reach,” Sephora USA Chief Executive Officer Jean-Andre Rougeot said “One challenge has been that our real estate portfolio has been mainly an urban mall store portfolio, with stores that perform extremely well, but do not reach into the suburban U.S.”

According to a statement, Kohl’s will open 200 locations by next fall and 850 in-store Sephora sites by 2023. Furthermore, 100 of Sephora’s beauty brands will be accessible through Kohl’s website next year, including some exclusive brands.   

“When we think about the beauty industry today, we’re very underrepresented,” Kohl’s CEO Michelle Gass said. “It’s a huge market [and] it’s expected to grow over the next few years.”

Kohl’s will be providing 2,500-square-foot shops to house Sephora, which will supply customers with the same services as most other stand alone locations, however further terms on the agreement have not been shared. Kohl’s employees will be trained by Sephora and will be located in various areas of the store. Gass revealed that the sephora logo will be visible outside Kohl’s stores. 

“We’re going to be very loud about this,” Gass said. “There’s no question that [shoppers] will see Sephora from the exterior of the building.”