On May 10 2020, Ulta Beauty became the subject of a viral Facebook post claiming that the chain continued paying their furloughed employees for the duration of the pandemic:
In what appeared to be originally a friends-locked post, the alliteratively-named Barbara Blaisdell Bingham explained that Ulta was extremely supportive when her late husband died, and again after she experienced a subsequent bereavement. Bingham spoke in the past tense at the end of her post (“I was a manager”), writing:
When my late husband died ULTA paid my salary for about 4 weeks and they said I could take longer but I wanted to get back to work. When we lost Bryan they did the same. Paid my salary till I came back to work.
Now they have paid there employees in the salon there salaries the entire time they’ve been off because of covid 19. That’s 1124 stores and salons.
So I’m asking all my friends if you need make up. Or you need the salon. Or you need fragrances. Go to ULTA.
They are a company that truly takes care of its employees. I’m so proud to say I was a manager for them
For readers unfamiliar with the brand, Ulta Beauty is a national chain of stores. Its locations primarily serve as a retail location, selling makeup and other beauty and grooming products and tools; Ulta also operates salons and employs cosmetologists.
That distinction was important in the context of the post, because Bingham said Ulta paid the “employees in the salon” their salaries for the duration of the COVID-19 pandemic. As it was worded, the post was not specific about whether the bulk of Ulta employees — those working in retail capacities — were also receiving salaries or were otherwise compensated by Ulta Beauty.
As for proportion, retail appeared to make up most of Ulta revenue. We were unable to find a readily available breakdown of the number of Ulta salon employees to retail employees, but salon services at Ulta were a small percentage of their overall business.
In August 2019, Crain’s Chicago Business reported:
Through the expansion of services like haircuts, color and blowouts; skin care and eyebrow tidying, Ulta lures customers into the store and they spend more. Loyalty members represent more than 90 percent of the company’s 2018 annual revenue of $6.72 billion, and service customers are the most devoted.
While services increased 8.5 percent in 2018, they represented less than 5 percent of sales. Yet they double guest frequency and increase the average transaction value by 300 percent—a sign that services have unbound potential.
Crain‘s cited sales data from 2018 for its 2019 reporting. On March 12 2020 — just before the coronavirus pandemic began closing down retail locations across the United States — Ulta issued its fourth-quarter fiscal report for 2019:
Ulta Beauty, Inc. (NASDAQ: ULTA) today announced financial results for the thirteen-week period (“Fourth Quarter”) and fifty-two week period (“Fiscal Year”) ended February 1, 2020 compared to the same periods ended February 2, 2019.
“The Ulta Beauty team delivered results for the fourth quarter at the high end of our expectations, and I am proud of how our teams worked together to serve our guests this holiday season,” said Mary Dillon, Chief Executive Officer. “Our enhanced omnichannel capabilities, combined with our merchandise exclusives, cross-category marketing events, and great execution by our store teams, enabled us to expand our market share and deliver a successful quarter.”
That press release contained revenue breakdowns, along with a chart indicating the salon portion of Ulta’s business was around the same proportion of earnings mentioned in the 2019 article:
In both 2020 and 2019, services accounted for four percent of Ulta Beauty sales. The post didn’t directly address the status of Ulta Beauty’s many retail-only employees, such as cashiers, who were unable to work during the pandemic.
On March 25 2020, CNBC noted Ulta was, at that time, “continuing to pay its workers’ wages and benefits.” But on April 9 2020 (more than a month prior to the Facebook post), trade publication WWD indicated that Ulta had begun furloughing its retail employees:
Ulta Beauty is furloughing many store and salon associates as the company’s stores remain closed due to the coronavirus pandemic.
“After thoughtful consideration, we have made the difficult decision to temporarily furlough many of our store and salon associates. During these uncertain times, we will do all we can to make sure these associates are supported,” Mary Dillon, Ulta chief executive officer, said in a statement.
One day before that, Marketwatch reported workers had been furloughed, Ulta CEO Mary Dillon donated money to an employee relief fund, and some of the chain’s workers remained actively employed in the company’s e-commerce division:
Ulta Beauty Inc. ULTA, +1.23% announced [on April 8 2020] that it intends to furlough its retail workers as of April 19 due to the spread of COVID-19. “… [Chief Executive Mary Dillon] will forego her base salary and has personally donated $500,000 to the Ulta Beauty Associate Relief Program, which will assist employees facing personal hardship from the coronavirus. Ulta continues to offer online sales, and is paying workers in its distribution centers an additional $2 an hour.
On Reddit, Ulta employees and customers continued discussing the chain’s drawbacks in operations on multiple subreddits. On r/Ulta, one post contrasted rival Sephora’s firing of a large number of store employees remotely in an April 3 2020 post:
On April 8 2020, a user shared a post about Ulta furloughing employees to r/MakeupAddiction:
The post appeared to contain an internal document issued to Ulta Beauty’s retail employees, and it read:
While Ulta Beauty has been proud to offer catastrophe compensation these last several weeks, and even extended it through April 18 , the extension of our store closure without a known reopen date has prompted another course of action. Beginning April 19 , your role will transition from catastrophe compensation coverage to a temporary furloughed status. This means you will be placed on a temporary unpaid leave of absence from work which will end when it is safe to reopen our stores.
One of the most important points we want to make is that you have the opportunity to apply and earn more money through government funds than what you are currently being paid through Ulta Beauty. This is based on the recent Federal Care Act which just recently went into effect which allows each associate to receive up to $600 per week in addition to half your weekly wage. (This will vary by associate and state.) So while we cannot tell you how to personally handle this, we strongly encourage you to look into the opportunity as soon as possible. You can find details on how to do this within a new resource document that will be posted to WorkJam this afternoon.
A few other things to take note of is that any of you currently receiving health benefits through Ulta Beauty will continue to do so and none of you will need to be rehired. Instead, we will be able to call you and welcome you back to work when we reopen.
Although the document was likely a leaked internal memorandum to Ulta workers, it made several points about Ulta’s action to that point and ongoing handling of the coronavirus pandemic, namely:
- Ulta offered “catastrophe compensation” to all employees through April 18 2020;
- On April 19 2020, that was discontinued;
- Ulta in part cited the federal government’s temporary, additional $600 in unemployment compensation during COVID-19;
- Ulta employees would possibly be eligible to collect more than their normal pay via that benefit;
- No health benefits were rescinded during the furlough;
- No Ulta Beauty employee would “need to be rehired,” meaning all positions were being held for furloughed workers.
On April 15 2020, one Ulta employee posted about being pleased with the company’s handling of COVID-19, particularly as compared to the way its direct competitor Sephora treated their own employees:
However, the process of receiving unemployment compensation was not straightforward for all workers. One Ulta employee indicated they had difficulty certifying their benefits, and generally expressed worry about the ongoing situation:
On May 14 2020, The Cut reported that Ulta was reopening some of its stores. Refinery29 included details about operations in the Ulta locations affected — including a stipulation all employees wear masks:
For the safety of customers, the Ulta experience will be very different from what it looked like pre-pandemic. For one, sampling is completely off the table (the display cases will be out, but no touching is allowed). Associates will be required to wear masks, and customers are strongly encouraged to as well. Staff will thoroughly clean and disinfect the store throughout the day. Customers will be required to practice social distancing of at least six feet, which means there will be a limit on the number of people in the store at any given time. Finally, all transactions will be contact-less through phone or credit card. “Our teams have worked with government and health officials and other retail leaders to bring the best shopping experiences to our stores,” says Dillon. You can read the rest of the retailer’s Shop Safe Standards on its website.
A viral Facebook post encouraged users to shop at Ulta Beauty due to its purported handling of employee compensation during the COVID-19 pandemic, indicating that all salon employees were paid for the pandemic’s duration as of May 11 2020. It is true that Ulta initially compensated employees from the initiation of the closures on March 19 2020 through April 18 2020. At that point, Ulta informed its employees that it would be discontinuing compensation, and encouraged them to apply for pandemic benefits. Ulta also said that it would not discontinue health insurance, nor would anyone have to re-apply for their jobs.
It was partly true Ulta continued paying workers and held their jobs — but not all employees initially received unemployment, and some employees reported difficulty or confusion regarding their pay.