Retailers Smell Opportunity in Beauty Sector

Since the Covid pandemic, the beauty industry has been outperforming many other product categories when it comes to sales growth. Several retailers are looking to capitalize on current trends by entering into partnerships to boost their branded offerings in the category.

In 2025, the U.S. prestige beauty industry saw both dollar and unit sales grow by 4% over 2024, with the average selling price up just 1%, according to researcher Circana. On the mass side, dollar sales were up 5% and unit sales up 2%. All categories, including makeup, haircare, skincare, and fragrance, saw positive sales trends overall. Among the factors driving these increases: consumers’ consideration of beauty products as an affordable indulgence in an uncertain economy, as well as their perception of beauty and wellness items as part of self-care, which they value as important to their mental well-being during turbulent times. 

Some of the retailers leaning into beauty through recent deals of various configurations include: 

• H&M, which announced in January 2026 that it was pairing with e.l.f. to launch a collection of three eaux de parfum. The collection took three favorite e.l.f. cosmetic brands, Power Grip Primer, Halo Glow, and Camo, and brought them into the fragrance category. The limited-edition collaboration marked H&M’s first entry into the beauty sector and e.l.f.’s first dip into fragrance, as well as the latter’s first global fashion collaboration. Limited-edition accessories complemented the launch, including gripping socks, a charm, and a bowling bag and mini bag. 

• Canadian women’s apparel retailer Aritzia, which revealed a partnership with Salt & Stone in September 2025, marking its inaugural entry into the beauty category. The luxury self-care-focused collection, sold on both brands’ websites and in select Aritzia boutiques in North America, encompassed Salt & Stone staples including deodorant, body wash, and body mist, all in an exclusive-to-Aritzia limited-edition scent, Lily & Yuzu. A candle in the same scent was also available as part of the collaboration. 

• Neiman Marcus, which partnered with Scentbird, in an agreement announced in April 2025, to launch a curated Neiman’s Select–identified array of 30 luxury perfume brands. The range is available on Scentbird’s site as part of its flexible subscription model, with new brands being added over time. Also in April 2025, Neiman launched a temporary in-store chess-themed perfume experience in its NorthPark (Dallas) store, with luxury fragrance house Mind Games.

Other retailers have taken the in-house route to launch or expand their beauty offerings. In October of last year, Old Navy launched Old Navy Beauty Co., a range of bodycare, skincare, and haircare solutions for all ages. After tests in 150 stores, 100 with grab-and-go sections and 50 with shop-in-shops, the initiative rolls out chain-wide in summer 2026. Debut Old Navy-branded products include hair and body mist, body lotion, body wash, and five scents, each available in three sizes. Beauty products from outside brands will also be part of the assortment in-store. 

Additional Gap-owned brands are also expected to expand their presence in the beauty category going forward. The company’s Banana Republic chain has had a fragrance line with Interparfums since 1995, while the Gap banner also had a deal with Interparfums in the 2000s and, in the 1990s, offered a line of in-house produced fragrances. Some of the latter, including Dream, Grass, Heaven, Om, and So Pink, became cult favorites and are currently sold in select Gap stores.   

There have been other retailer-linked fragrance initiatives over time, of course. But industry trends make the category particularly enticing right now for retailers without a program in place. 

It should be noted that beauty companies have been working to reduce their SKU count, a reversal from the continuous-launch strategy of the recent past. They feel that a more well-thought-out assortment will bring financial and operational benefits, given the crowded market and consumers’ current shopping preferences, and hopefully continue to drive strong sales for the category overall. 

A reminder that Raugust Communications’ monthly e-newsletter comes out tomorrow, April 21, 2026. The Licensing Topic of the Month examines a time of great change in the industry, while the Datapoint research spotlight looks at the evolution of licensing in the home textiles market over the last 18 months. If you do not yet subscribe to this free publication, you can do so here.