While some retailers have struggled to adapt to the rise of online shopping, others are doing a tremendous job of retaining strong consumer demand both online and in-store. In this segment of Backstage Pass, recorded on Dec. 22, Fool contributors Deidre Woollard and Rachel Warren discuss a recent article by Bloomberg and one top retail stock for investors to consider right now.
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Deidre Woollard: What I liked in this article was they quoted Rick Caruso. I used to live in LA for a long time. Rick Caruso has developed a lot of major projects there. What he's famous for is doing this like a full small town, like a Disneyfied version of a small town like his Americana Brand in Glendale. It's a mall, but it doesn't look like a mall. It looks like a spot with all these little stores, and there's a cute little trolley and a fountain, and things like that.
I think that's interesting because it connects to what I'm seeing happening in retail, which is a move away from bigger boxes, move toward smaller storefronts, a move outside of the traditional malls, so like Express is moving out of malls, Victoria's Secret, Gap -- they're all experimenting with different storefronts that are outside of the traditional mall setting.
But going back to Target, I think one of the things that's so fascinating about Target is they're taking that idea and they're doing store within store. They started with CVS a while back, they've got Levi's, they've had the Magnolia brand in there, and now they've got Ulta (ULTA -2.05%). Ulta, I think, is just fascinating. That's a stock I'm excited about. It's interesting because beauty is always one of those pretty recession-proof types of businesses.
But Ulta has been really smart about it in that they've really gotten very good with their e-commerce, as well as physical stores. They've been expanding over time. I just wanted to share my screen for a sec, share little peek at their -- this was their investor-day report with their net sales.
You can see how fast they're growing. Then here, the momentum that they are seeing, they are really starting to take up some of what used to be Sephora's market share. And they're getting really great results from their loyalty program. They're growing members. They're growing member count, member spend. They're growing their prestige market, which I think is interesting.
All of that makes me really excited about this partnership because I think that this is going to lead to a whole new audience for Ulta. I think that Ulta is going to be smart enough to capture those Target shoppers into their loyalty programs and really continue to grow. Really, they've gone beyond makeup, they're in skincare, they're in hair care, and really riding that whole self-care movement. That's a stock that I'm really excited about.
Rachel Warren: Wow, that's fantastic. Yeah, Ulta, that's an interesting company. I've shopped there, but I haven't looked at the business so much, so I'm going to have to definitely check that out. I think the key here -- I've been very much fond of investing in e-commerce stocks.
I think for me, the retail stocks that really stick out to me in terms of companies that have more of a brick-and-mortar business, are the ones that have done really well and building up this dual presence of online, as well as in-person sales. I think that's something key.
