The deals, channels, and turnarounds that defined the beauty industry in 2025

Between a $1 billion deal, the rise of TikTok Shop, the fall of Ulta Beauty and Target, and a ton of beauty turnarounds, 2025 was a busy year in beauty. So slap on your 2025 trendy face mask of choice—perhaps your slightly alarming-looking LED light mask, or one made with salmon DNA—and let’s jump in.

Retailers’ and brands’ turnarounds and challenges

Facing dipping sales to start the year, newly appointed Ulta Beauty President and CEO Kecia Steelman introduced the retailer’s Ulta Beauty Unleashed turnaround plan in March to combat “intense” competition. The plan included a slew of efforts—like renewed focus on brand building and digital acceleration, international expansion, and organizational changes.

Weeks later, Steelman said Ulta was pausing its shop-in-shop partnership with Target, which started in 2021. Weeks before the pause, employees took to Reddit to identify issues with the partnership, like shoplifting, understaffing, and a lackluster customer experience, Retail Brew found. Then, in August, the two retailers officially announced the partnership would end in August 2026.

By Q3, Ulta’s results “exceeded our expectations,” Steelman said on its earnings call earlier this month, noting the retailer was delivering on her turnaround strategy. The retailer reported net sales up 12.9% and comp sales up 6.3%, as beauty engagement “remained healthy” across mass and prestige, Steelman said.

Ulta wasn’t alone in its turnaround, as Estée Lauder, Bath & Body Works, and Olaplex were among other beauty players unveiling multipronged plans to jumpstart sales. A future move into beauty is also core to Gap’s turnaround strategy, the retailer said in September.

And several beauty companies, including E.l.f. Beauty, Coty, and Revlon-owner Helen of Troy, announced tariff-driven price bumps this year. Ulta’s interim CFO, Chris Lialios, noted on the retailer’s Q3 call that it saw brands’ price increases pick up in Q3.

Online channels gain momentum

Online channels like Amazon and TikTok Shop, meanwhile, continued to grow their share in the beauty market. Amazon gained ground in prestige, expanding its Premium Beauty store with brands like Charlotte Tilbury and Drunk Elephant.

TikTok Shop, meanwhile, is “the fastest growing beauty retailer that we’ve ever seen,” Anna Mayo, VP of NIQ’s beauty vertical, told Retail Brew. K-beauty brands, experiencing a “second wave” of popularity, saw particular success on TikTok Shop this year, with brands like Medicube and Anua going viral, contributing to the segment’s sales growing 37% YoY to $2 billion in the US this year, per NIQ.

And as consumers have increasingly turned to large language models for product recommendations, nearly a third of those using AI tools for shopping have bought beauty and apparel items, Natasha Sommerfeld, partner at Bain & Company, told Retail Brew—and beauty leaders are taking note.

Beauty’s big deals

While E.l.f. had a lackluster start to the year amid weaker sales in mass beauty, by spring, it secured the year’s blockbuster beauty deal. The company bought Hailey Bieber’s Rhode, the brand known for its lip treatments (and phone cases to hold them), for $1 billion. The move has given the mass beauty company a presence in prestige retail, as Rhode made what LVMH called a “record-breaking” retail debut at Sephora in September, driving the retailer’s “remarkable” Q3 performance.

Other notable M&A deals focused on scents: L’Oréal boosted its fragrance foothold by agreeing to buy Kering’s beauty business, while Church & Dwight scooped up hand sanitizer brand Touchland, which also expanded into fragrance this year, for $880 million.

Fragrance sparkles as mass sales pick up

Mass beauty made a bit of a comeback in 2025, as sales outpaced prestige for the first time in years in Q1, largely due to price increases, Circana reported. In the first half of the year, mass sales rose 4%, while prestige jumped 2%, the two segments “converging” as shoppers chose premium mass products and more affordable prestige options. By Q3, prestige sales were up 4% and mass up 5%, with mass seeing an increase in unit sales.

And speaking of scents—throughout the year, fragrance reigned supreme, particularly in mass, where sales soared 17% YoY in Q3, per Circana.