Following earlier rumours, it was confirmed yesterday that Ulta Beauty, which operates nearly 1,500 cosmetics stores in the US, is entering the UK market with the purchase of high street chain Space NK.
Founded by industry veteran Nicky Kinnaird, Space NK offers premium beauty and perfume brands in the UK and Ireland through its 83 retail stores, as well as online.
Ulta Beauty CEO Kecia Steelman said the deal offers an opportunity to enter a growing market and underscores the company’s focus on international expansion to support its turnaround plan.
Investment firm Manzanita Capital has owned Space NK for more than 20 years but put the business up for sale last year. Ulta Beauty did not disclose the financial terms of the transaction, but earlier reports suggested it was likely to be valued in excess of £300m.
Space NK will operate as a standalone subsidiary of Ulta Beauty and will continue to be led by its existing management team, including its Chief Executive, Andy Lightfoot.
Over the year to the end of March 2024, Space NK’s pre-tax profit jumped from £1.5m to £7.5m on turnover up 34% to £196.5m.
“Space NK’s management team, with the backing of Manzanita Capital, has done an excellent job building a differentiated beauty experience that inspires consumers through tailored product mixes. We look forward to working with the Space NK team to support their continued growth and success,” added Steelman.
Meanwhile, Bill Fisher, CEO and founder of Manzanita Capital, commented: “Space NK has been an important part of Manzanita Capital for the past 23 years. The acquisition of Space NK from Nicky Kinnaird was a key influence in developing Manzanita’s unique expertise in selecting and nurturing luxury and niche premium beauty and perfume brands.”
“I have every confidence that Ulta Beauty and this terrific management team will take Space NK to new heights.”
NAM Implications:
- Operating Space NK as a standalone subsidiary will allow Ulta Beauty to understand the UK market ‘up close’.
- Whilst also identifying other potential acquisitions.
- Meanwhile, Space NK will benefit from accessing the beauty-based resources of Ulta Beauty in terms of realising its full potential in the UK.
- (and possibly the US…)
