Ulta Beauty chief executive Mary Dillon is stepping down in June after an eight-year stint during which she transformed the cosmetics, skincare and haircare chain into a retail behemoth with leading e-commerce and an assortment that spans from the low end to the high end.
When Dillon, a former U.S. Cellular CEO and a top McDonald’s marketing executive, took the reins in 2013, Ulta had already begun an upward trajectory. The company found that a mix of salon services, a wide assortment of products up and down the price spectrum, and stores in strip-mall centers was a formula that helped it siphon business from both department stores and drugstore chains.
Still, while Ulta was selling a lot of merchandise, it was falling behind on e-commerce and its supply chain before Dillon’s arrival. Customers were not all that loyal, nor was the general public all that familiar with Ulta.
Dillon, most recently ranked No. 49 on the Fortune Most Powerful Women in business list, set about adding more glamorous and high-end products to Ulta’s assortment, later scoring a coup by landing a big deal with Kylie Jenner’s cosmetics line, among other big moves. E-commerce became a massive business, helping Ulta better compete against Sephora, most notably. Dillon also added significantly to Ulta’s salon services.
On Dillon’s watch, Ulta’s annual sales have more than tripled, hitting a peak of $7.4 billion in 2019. Sales fell 17% last year after the pandemic forced its stores to close for weeks and prevented customers from trying and sampling products, one of the retailer’s core attractions. (Ulta said on Thursday that it expects sales to get close to 2019 levels in 2021.)
Under Dillon, the retailer’s store count nearly doubled, to 1,264, reaching a long term goal she set out in 2013 when she became CEO. In a daring move, she recently struck a deal to have hundreds of Ulta shop-in-shops open inside Target stores.
Despite a bumpy 2020, Ulta’s stock has soared during Dillon’s tenure: Shares have more than tripled since July 2013.
With Dillon’s departure, there will be 39 women CEOs on the Fortune 500, assuming no changes in previously announced appointments and departures.
Dillon’s marketing savvy, honed during her stint as marketing chief at McDonald’s for five years starting in 2005, helped her transform Ulta’s Ultamate loyalty program into an industry leader, one with 32 million members now.
But much of the credit of Ulta’s success can be shared with Dillon’s right hand man, and now successor, Dave Kimbell, who has previously headed Ulta’s merchandise and marketing units. Kimbell has been president since 2019, a move presaging that he would eventually succeed Dillon. Dillon steps down on June 2 but will stay as executive chairman for one year.
“Dave is a world-class business leader with incredible passion, deep beauty expertise, unwavering drive and a values-based leadership style,” Dillon said in praise of her successor. “There is no one better suited to unlock even more beautiful possibilities.”
No doubt anticipating questions about replacing a highly regarded female CEO leading a company whose customers are primarily women, Ulta pointed out in its press release that its upper management ranks are made up of 60% women and 20% people of color. The company also announced the promotion of one its other female leaders: Kecia Steelman, who has led Ulta’s store operations, will become chief operating officer.