Can Ulta Beauty Spark a Turnaround for Bath & Body Works?

As Bath & Body Works faces declining sales and shrinking mall traffic, its new retail partnership with Ulta Beauty raises questions about whether wholesale expansion can truly revive the legacy brand.

Does Bath & Body Works, the $4 billion-plus mall staple built on scented hand soaps, shower gels, and three-wick candles, need a lifeline to stay relevant?

Confronting declining sales, waning mall traffic, and a fiercely competitive beauty landscape, the retailer is betting on broader distribution. The company is teaming up with Ulta Beauty to launch 23 of its signature products across more than 600 Ulta stores and online starting July 12.

This partnership comes at a critical juncture. After riding a pandemic-fueled wave that boosted sales by 46%—from $5.4 billion in 2020 to nearly $7.9 billion in 2021—the retailer has struggled to maintain momentum. Last year, sales dipped 0.2% to just under $7.3 billion, followed by a 3% decline to $1.38 billion in the first quarter of this year. Full-year sales are projected to slide another 2.5% to 4.5% as turnaround efforts continue.

Dubbed its "Consumer First Formula," the brand's turnaround strategy focuses on streamlining product assortments, investing in digital capabilities, deepening loyalty programs, expanding distribution beyond its own brick-and-mortar stores, and refocusing on core categories like fragrance and body care. To that end, the company has scaled back underperforming haircare and men’s grooming lines, launched on Amazon earlier this year, and expanded into more than 600 college bookstores nationwide last year.

Simultaneously, Bath & Body Works is reducing its reliance on traditional malls. Today, nearly 60% of its roughly 1,900 North American stores are located in off-mall shopping centers and standalone locations, with plans to push that figure to 75% over the next few years.

Maly Bernstein, the former Bluemercury CEO who stepped in as Bath & Body Works' Chief Operating Officer last year, noted in a LinkedIn post that the Ulta partnership "reflects how we’re bringing our Consumer First Formula to life, meeting consumers where they’re already shopping for specialty beauty and fragrance and creating new ways to discover Bath & Body Works. It’s also an important example of how we’re working to win in the marketplace, expanding our reach through a complementary brand with a curated assortment designed specifically for the Ulta Beauty consumer."

To gauge how the beauty industry views this strategy, we asked 10 retail executives, investors, consultants, and analysts: Can Bath & Body Works' partnership with Ulta truly drive its turnaround?

Oliver Garfield — Former CEO, Cos Bar

The short answer is that the Ulta partnership will help at the margins, but it won't be the turnaround driver the headlines suggest. First, look at what Bath & Body Works does best: for decades, it has been a mall-based specialty retailer controlling the entire in-store experience—the ambient scent, the lighting, the walls of seasonal products, and the associate handing you a basket the moment you walk in. That immersive environment is the brand.

Inside Ulta, the company trades that control for a curated endcap or a gondola display. The real risk is that an assortment built on sensory immersion and impulse buying gets reduced to just another shelf shoppers walk past. While their iconic logo offers instant brand recognition, visibility on a shelf is not the same as the experience that built their customer loyalty in the first place.

From a sales perspective, however, this is a smart, low-risk move. Launching in over 600 of Ulta's top-performing stores, on Ulta.com, and gaining access to a loyalty program with over 40 million members exposes the brand to a massive pool of beauty shoppers. This incremental wholesale revenue should layer on top of existing retail and direct-to-consumer (DTC) channels without cannibalizing them.

There is also a potential brand-equity upside. Bath & Body Works has conditioned its customers to expect constant promotions. Ulta's cleaner, loyalty-driven retail environment could introduce the brand to shoppers willing to pay full price.

Where I disagree is calling this a turnaround engine. The "Consumer First Formula" is fundamentally about reigniting product innovation, newness, and pricing discipline—challenges that must be solved through their own product development, stores, and DTC channels, not simply by adding a new distributor. Wholesale can bring in valuable incremental revenue, but for a company of this scale, a limited, low-control assortment in 600 doors is a tactical sales boost, not a structural fix. It is the right move, but we shouldn't mistake it for a true tipping point.

Neil Saunders — Managing Director of Retail, GlobalData

Bath & Body Works is a strong brand and a solid retailer. Its primary challenge is that it is already the market leader in many of its core categories, like shower gels and candles. High market share presents two distinct hurdles: making incremental growth incredibly difficult to achieve, and turning the business into a prime target for competitors.

That competitive landscape has expanded significantly, now including a wave of indie brands and agile sellers on platforms like Amazon and TikTok Shop, where some creators have built million-order empires almost overnight. While their individual market share gains may be small, collectively they are chipping away at Bath & Body Works' dominance. To counter this, Bath & Body Works must find new ways to get in front of consumers and drive volume.

Wholesale is the obvious route to achieve this, starting with Amazon. Ulta is the latest expansion of this strategy, offering significant potential to scale brand reach. However, the assortments curated for Ulta must be tailored to its specific consumer base. This means prioritizing clean beauty, advanced formulations, and targeted skincare solutions. While Bath & Body Works has made strides in these areas, a channel-specific approach remains critical for success.

Rose Hamilton — Founder and CEO, Compass Rose Ventures

The Ulta partnership can certainly support Bath & Body Works’ turnaround, but not simply because it adds 600 physical doors. Bath & Body Works does not suffer from a brand awareness problem. The real challenge lies in how consumers perceive the brand.

For many shoppers, the brand is still synonymous with mall trips, heavy promotions, gifting, seasonal fragrances, or a quick run for three-wick candles. While these are powerful associations, they can also be limiting if Bath & Body Works wants to position itself as a modern, beauty-relevant player and reduce its reliance on constant discounting.

This is why the Ulta partnership is so compelling. Ulta gives Bath & Body Works a new level of credibility. It positions the brand alongside daily beauty routines, prestige fragrance exploration, and body care replenishment, capturing a shopper who might not have planned to visit a standalone Bath & Body Works store.

This setup can drive brand reappraisal, which is far more valuable than mere reach. However, product curation must remain disciplined. If Bath & Body Works relies too heavily on its typical promotional strategy within Ulta, the partnership risks becoming just another distribution channel rather than a true brand repositioning. Indeed, many beauty companies are learning that relying on transactional, discount-driven sales can erode long-term brand equity.

The key metrics to watch will be whether Ulta attracts incremental shoppers, supports healthier pricing margins, and builds beauty credibility for Bath & Body Works without sacrificing the emotional accessibility that made the brand a household name.

Ultimately, the true test of this partnership is not whether 600 new doors deliver an immediate sales lift, but whether they give consumers a compelling reason to see Bath & Body Works in a fresh light.

Rich Gersten — Co-Founder and Managing Partner, True Beauty Ventures

The partnership between Ulta and Bath & Body Works represents a compelling strategic opportunity, but its long-term success will depend on the brand's ability to convert this increased exposure into sustained consumer demand.

Bath & Body Works already boasts one of the largest retail footprints in the beauty sector and enjoys massive brand awareness. The challenge today isn’t distribution; it is maintaining relevance in a category defined by rapid innovation, constant indie brand launches, and shifting consumer preferences. Ulta provides direct access to highly engaged beauty shoppers, offering Bath & Body Works a prime opportunity to reintroduce itself to consumers who might not otherwise step into its standalone stores.

The timing is also ideal. Fragrance remains one of the fastest-growing categories in beauty, and Bath & Body Works is well-positioned to capitalize on this momentum by showcasing its portfolio in a destination where consumers are actively exploring and purchasing fragrances.

Ultimately, this partnership is less about expanding physical distribution and more about customer acquisition. If Bath & Body Works can leverage Ulta to generate fresh excitement and give a new generation of consumers a reason to choose its products over an increasingly crowded competitive landscape, this partnership could become a cornerstone of the company's broader turnaround strategy.

Lane Barrocas — Beauty Retail Consultant

Bath & Body Works’ entry into Ulta has the potential to be highly impactful, but not for the reasons most industry observers might think. The real value lies not in incremental reach, but in the opportunity for Bath & Body Works to structurally optimize its profit and loss (P&L) statement.

The brand’s primary challenge today is foot traffic, not demand. With roughly 1,780 U.S. stores—about 40% of which are still located in traditional malls—Bath & Body Works is over-distributed in a channel that no longer drives the consumer volume it once did.

While some analysts, such as those at Jefferies, point out that 63% of Bath & Body Works stores sit within a mile of an Ulta location and flag this as a cannibalization risk, I view this geographic overlap as a major strategic advantage. Ulta generates some of the highest-productivity beauty traffic in the country, particularly in fragrance, where they have been posting high-teen comparable sales growth. In many ways, partnering with Ulta is a much-needed traffic correction.

The second critical factor is the ongoing shift in channel mix. With Bath & Body Works’ average unit retail (AUR) sitting in the $8 to $16 range, direct-to-consumer (DTC) e-commerce economics are structurally challenging. High fulfillment costs, shipping subsidies, marketplace fees, and low average order values heavily compress contribution margins. This is why digital acceleration, while sounding attractive on paper, is incredibly difficult to scale profitably for mass-priced brands.

By partnering, Ulta absorbs much of this operational burden. They build the multi-brand basket, set the free-shipping thresholds, blend Bath & Body Works’ lower AUR with prestige price points, and take on upfront inventory risk. The bigger story here is that Bath & Body Works is strategically rebalancing its channel mix away from a costly, low-margin reliance on owned DTC channels.

Ulta, Amazon, and selective wholesale partners are poised to become the profitable volume engines that direct-to-consumer (DTC) channels simply cannot deliver at Bath & Body Works’ price point. This follows the proven playbook of brands like E.l.f. Beauty—which recently launched a haircare line to drive its next phase of growth—Sol de Janeiro, Native, and Dr. Teal’s—players that leverage DTC for brand storytelling and community loyalty, but do not rely on it to anchor the P&L. While Bath & Body Works won't abandon DTC, it will pivot away from treating it as a primary growth engine. Ulta steps in to fill that high-volume, highly profitable gap.

The true power of this partnership lies in retail footprint rationalization. Bath & Body Works cannot repair its P&L without optimizing its physical store base; hundreds of its mall-based locations are currently operating at break-even or at a loss. Jefferies reports that Bath & Body Works is targeting a 75% off-mall retail mix, up from roughly 60% today. However, executing this transition independently is both slow and capital-intensive.

Ulta completely shifts this dynamic. With a 63% geographic overlap, Bath & Body Works can confidently shutter underperforming mall locations, close stores near high-performing Ulta doors where Ulta already captures the bath-and-body spend, and streamline strip-center locations that no longer justify their operational overhead. Ulta serves as the strategic bridge, allowing Bath & Body Works to shrink its physical footprint without losing brand presence—the single most critical structural lever in its turnaround strategy.

Furthermore, Ulta acts as an efficient inventory-management engine, addressing a major operational pain point. Currently, Bath & Body Works struggles with aged seasonal inventory, excess stock, slow-moving SKUs, and a heavy reliance on margin-eroding promotions to clear shelves. Ulta offers a high-velocity, brand-safe alternative. Through signature events like the 21 Days of Beauty, exclusive loyalty promotions, gifting programs, and digital add-on mechanics, Ulta provides a national clearing channel that moves volume without degrading Bath & Body Works' brand equity.

Ultimately, will this partnership secure Bath & Body Works' turnaround? Yes—but only if leadership treats it as a structural reset rather than a mere distribution play. Bath & Body Works does not need more customers to fix its balance sheet. It needs lower occupancy costs, reduced labor expenses, minimized capital expenditure, a higher wholesale mix, faster inventory turns, and fewer mall stores. Ulta enables every single one of these shifts. It is not the turnaround itself, but it is the essential catalyst making it possible.

Lara Schmoisman — Founder and CEO, The Darl

From a brand-building and growth perspective, this partnership is a masterclass in aggressive distribution expansion. However, it functions more like a high-impact adrenaline shot than a permanent cure for deep-seated retail challenges. On paper, placing Bath & Body Works into 600 Ulta doors is a brilliant market penetration move that immediately addresses their most pressing brick-and-mortar issue: declining foot traffic in traditional shopping malls.

By integrating into Ulta’s retail ecosystem, Bath & Body Works captures high-intent foot traffic, placing its products directly into the "beauty baskets" of consumers who are already in a buying mindset. This creates a seamless, low-friction upsell opportunity—a shopper looking for prestige haircare or premium cosmetics can easily toss a high-margin candle or body cream into their cart on impulse.

From a brand equity standpoint, the real prize isn't just physical shelf space; it is direct access to Ulta's robust Ultamate Rewards loyalty data. This partnership allows Bath & Body Works to engage a highly active, modern beauty demographic that may have outgrown the nostalgic mall experience but remains highly receptive to digital and physical touchpoints. Additionally, years of heavy reliance on aggressive, high-volume promotional cycles—such as their signature "Buy 3, Get 3" events—have diluted the brand's perceived value.

Positioning their newly curated assortment alongside premium, trending brands on Ulta's sales floor naturally elevates consumer perception, providing a prestigious backdrop to showcase their latest product innovations.

However, as a growth strategist, the critical question remains: will this move drive genuine incremental growth, or will it simply cannibalize existing sales? The true test of this turnaround plan lies in whether the partnership introduces the brand to entirely new consumer segments, or if it merely shifts loyal shoppers away from standalone Bath & Body Works locations to nearby Ulta doors.

If a consumer chooses to buy their favorite fragrance mist at Ulta instead of walking down the mall to a standalone storefront, Bath & Body Works is essentially surrendering a portion of its retail margin to Ulta without expanding its overall market share. Ultimately, while this move will provide the immediate top-line revenue spike needed to jumpstart the turnaround and buy time with investors, new distribution channels can only mask operational challenges for so long.

For this partnership to yield sustainable, long-term growth, the brand must deliver on the innovation promise of its "Consumer First Formula." A new address on a retail shelf cannot compensate for a lack of genuine product novelty once the initial excitement fades.

Tina Bou-Saba — Founder, CXT Investments

I will confess to being a bit puzzled by this partnership. Not because it’s a bad idea, but simply because it seems unlikely to significantly move the needle for Bath & Body Works. Bath & Body Works already has massive brand awareness and roughly 1,800 U.S. stores. As such, the company is certainly not lacking in retail footprint. Therefore, Bath & Body Works must believe that partnering with Ulta Beauty will expose the brand to entirely new customer segments, while building credibility among beauty shoppers who know the brand but don't currently shop there.

However, this move doesn't quite seem to align with the core priorities of their "Consumer First Formula" strategy. Moreover, given Ulta’s extensive in-store assortment, it is unlikely that this footprint will translate into a massive, standalone volume driver for Bath & Body Works. The company is likely hoping that Ulta shoppers will discover, try, and purchase its products in an Ulta environment, and then transition into direct customers via Bath & Body Works’ own stores and website. In that scenario, the Ulta partnership acts more like a customer acquisition and lead-generation tool.

While it’s not a terrible strategy, it’s hard to see it as a major growth engine. Personally, I would prefer to see Bath & Body Works focus on core product innovation, merchandising, and elevating the customer experience within its own retail fleet. The company’s sluggish performance during a highly favorable fragrance cycle suggests deeper execution challenges and leadership missteps over the past few years. Selling through Ulta doesn't solve those fundamental issues.

Stephen Letourneau — COO and CBO, BFYW

Here in Columbus, Ohio, Bath & Body Works holds a very special place in our hearts, and we are all rooting for this brand evolution. Anyone who wasn't around in the 1990s will never truly understand the cultural revolution that Bath & Body Works ushered in. Scent-layering your Juniper Breeze and Country Apple, the absolute necessity of Scrubby Buddies at bath time, and eventually, the chic evolution when they partnered with Ian Ginsberg of C.O. Bigelow to bring a slice of New York City apothecary culture to Columbus.

As new stores popped up rapidly, the ultimate cool gift was always wrapped in that signature gingham ribbon. The brand quickly evolved into candles, eventually launching the White Barn Candle Co. and opening Columbus's own C.O. Bigelow at Easton Town Center. The company was poised to be the go-to beauty destination for another generation.

But then we watched its cultural currency—and subsequently its stock price—slide. It went from quaint to chic to strip-mall staple in what felt like moments. It wasn't a major corporate scandal or a product safety meltdown; it just felt like a conscious decision to stop being playful and inventive.

After their color cosmetics collection launched (and thankfully exited), there was a promising plan to transition stores into chic, day-spa service centers that never actually materialized. No longer the shiny beacon of cool, partnerships faded and the core collection stagnated. Consumers no longer wanted to "layer" heavy synthetic scents or smell like Sweet Pea and Cucumber Melon. As consumer scent preferences evolved, the marketing didn't. Eventually, there wasn't enough glitter body lotion in the world to save the brand.

Partnering with Ulta is a highly savvy move for a brand looking to reinvent itself. Ulta has the consumer data, the Bath & Body Works team has the heritage, and a team of innovators is waiting for the chance to evolve. For this partnership to succeed, Ulta needs to share its deep consumer insights to help Bath & Body Works understand exactly what Gen Z and younger cohorts are searching for.

Bath & Body Works must give its innovation team the runway to modernize the product line while maintaining the quality baked into the brand's DNA. The brand needs to be allowed to grow up, and Ulta needs to give them the merchandising space to shine with a product block that modern beauty consumers actually want to buy. It cannot just be air fresheners and glitter soaps.

If they can curate a collection of playful, modern scents alongside some of the sophisticated, apothecary-style aromatherapy pieces that C.O. Bigelow originally brought to their catalog, they will be a force to be reckoned with. Given the massive wave of '90s nostalgia right now, Bath & Body Works and Ulta are perfectly positioned to make a major market impact.

Kelly St. John — Founder and CEO, KSJ Collective

I think the partnership can absolutely help, but only if Bath & Body Works treats Ulta as something far greater than just another wholesale door.

The single biggest opportunity here is brand repositioning. Bath & Body Works is an incredibly powerful brand, but it has also conditioned consumers to shop primarily around heavy promotions, seasonal semi-annual sales, and stock-up events. Ulta gives the company a unique opportunity to show up in a beauty-first environment where shoppers are already in a mindset of discovery, routine-building, and trading up to premium products. This is incredibly important as the body care category continues to premiumize, with consumers treating their body care routines with the same level of intentionality and active ingredients as facial skincare.

At KSJ Collective, we are seeing exceptionally strong performance from body care brands on Ulta’s online marketplace, and we know that Ulta is actively evaluating body brands for future physical store expansion in 2027 and beyond. This indicates that the retailer is leaning into prestige body care in a very strategic, intentional way.

Bath & Body Works has earned the right to play in this space because it already owns fragrance-led body care in the consumer’s mind. However, they must be highly selective about their product assortment. The Ulta shopper will respond best to products that feel curated, sensorial, and beauty-relevant—not simply a copy-paste of the traditional mall store experience.

So, yes, I think it can support the turnaround by expanding reach, modernizing the brand’s beauty credibility, and creating a new discovery channel. However, it will only be truly additive if Bath & Body Works uses the partnership to elevate the consumer experience and reduce reliance on discount-driven traffic.

Alexzndra Sylvia — Partner, Beauty and Wellness, Mercenary Beauty

I think this partnership can help accelerate Bath & Body Works' turnaround. It certainly can't hurt.

The wholesale revenue alone won't materially change Bath & Body Works' trajectory. The real opportunity is customer acquisition. Ulta gives the brand access to a younger, beauty-focused consumer while elevating brand perception and expanding its reach beyond the mall into a discovery-driven beauty environment.

Three reasons I think this is a smart move:

1. They're joining the winners.

Bath & Body Works is trailing the market, while Ulta continues to post positive comparable sales. If you're trying to reignite growth, partnering with a winning retailer is a smart move. It also advances Bath & Body Works' strategy of reducing its reliance on mall traffic without the capital expenditure of adding more standalone stores.

2. The curated assortment is the real opportunity.

The phrase that stood out to me was "a curated assortment designed specifically for the Ulta Beauty consumer." That's the key to making this partnership work. Ulta wins by striking the right balance between nostalgia and what's trending.

For many millennials, Bath & Body Works was our introduction to fragrance. We collected matching mists, creams, and shower gels in scents like Sweet Pea and Cucumber Melon. Today's Gen Z shopper has a similar obsession with building fragrance wardrobes, layering scents, and collecting the latest gourmand fragrances. A thoughtfully curated assortment can tap into that same collecting behavior by pairing iconic favorites with today's hero products, making Bath & Body Works feel both nostalgic and completely relevant again.

3. It's about relevance, not awareness.

Bath & Body Works doesn't have an awareness problem; it has a relevance problem. Ulta helps reposition the brand within today's beauty landscape and reintroduce it to consumers who haven't stepped into a Bath & Body Works—or walked out smelling like 13 different scents—since the early 2000s.

Like any retail partnership, success will come down to execution. If this is treated as just another wholesale account, the impact will be limited. But if Bath & Body Works uses Ulta as a customer acquisition and brand-building platform, it could become one of the smartest moves in its turnaround strategy.