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Ulta Beauty CEO says retailers need support from Washington

Ulta Beauty CEO Mary Dillon said she’s encouraged by Washington’s efforts to stimulate the economy during the coronavirus pandemic, but said millions of laid off or furloughed retail workers will need sustained support.

“We need companies to survive. We need people to go back to work,” she said in an interview with “Squawk on the Street” Wednesday. “And so we are counting on making sure that the bill that passes really thinks this through and gives us options in terms of liquidity and capital.”

Dillon is chair of the Retail Industry Leaders Association, a lobbying group for retailers, product manufacturers and service suppliers.

About 1 in every 4 people work in retail in the U.S. Some retailers, such as grocery stores and pharmacies, are seeing a peak in demand, but Dillon said a huge swath of stores are closed and millions of people are out of work.

Ulta is one of dozens of U.S. retailers that have temporarily shuttered stores because of the coronavirus pandemic. The retailer is continuing to pay its workers’ wages and benefits. 

The company is still selling cosmetics and skin-care products online, but said even with these operations retailers can struggle, Dillon said.

“A lot of times, people think it’s great that e-commerce is up and running, which is great, but 80% to 85% of retail sales still happen in brick-and-mortar stores,” she said.

Ulta said Monday that it’s drawn down $800 million in revolving credit and is “re-evaluating the pace and timing of its stock repurchase program.” The company said it’s slashed inventory and capital expenditure plans, too.

The beauty industry faces unique challenges with the pandemic. Customers may be less likely to buy makeup as they work from home, cancel social plans and have tighter budgets due to layoffs or furloughs. With stores closed, customers can’t get in-person recommendations from beauty consultations or try testers to pick out of a lipstick.

Dillon said the company is encouraging customers to use its digital tool, called “Glam Lab,” to virtually try on different makeup or find the right color match. She said Ulta has seen customers purchases essentials online, such as shampoo and conditioner, along with self-care items like masks and skin care to pamper themselves at home.

And, she added, working from home doesn’t mean everyone has given up their beauty routines.

“Many of us are on video conferences all the time,” she said. “We still want to look good in that environment.”

“We think we can help to bring a little bit of joy and normalcy to a time that’s very difficult for all,” she said.

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