Ulta Beauty (NASDAQ:ULTA) CEO Dave Kimbell said it is not enough for stores to put Black-owned brands on shelves.
Instead, he said, the retailer wants to make sure those brands gain a fan following and ultimately, have staying power.
"It’s one thing to arrive on our shelves, but it’s another thing to thrive," he said. "And that’s what we want, every brand that we carry — and certainly BIPOC [Black, Indigenous and People of Colour] founded brands."
On Thursday, Ulta said it plans to spend $50 million on diversity and inclusion initiatives this year, including investments to ratchet up support for emerging brands.
The company plans to start an accelerator program to mentor entrepreneurs of colour, invest $5 million in a venture capital fund for their early-stage companies and lean into marketing efforts to get their products in front of more consumers. That includes putting $3.5 million toward in-store merchandising, such as displays that grab shoppers’ attention.
About $25 million of the annual spending will go toward company ads, social media campaigns and similar investments to reach beauty consumers of diverse backgrounds. Ulta plans to spend an additional $8.5 million on ads and marketing for Black-owned, led or founded brands.
Ulta is building on its previous diversity investments. Last year, the retailer more than doubled the number of Black-owned brands it carries from 13 to 28. The company said it is roughly halfway toward reaching its goal of 15% representation on shelves.
ULTA shares began Thursday trade down $2.39 to $369.30.
