Ulta 2014 Annual Report Download - page 14

management, merchandising, cash management, scheduling, hiring and guest services. Members of store
management receive bonuses depending on their position and based upon various metrics. Each general manager
reports to a district manager, who in turn reports to a Regional Vice President of Operations who in turn reports
to the Senior Vice President of Operations who in turn reports to our Chief Executive Officer. Each store team
receives additional support from time to time from recruiting specialists for the retail and salon operations,
regionally based human resource managers, a field loss prevention team, salon technical trainers, management
trainers and vendors.
Ulta stores are open seven days a week, eleven hours a day, Monday through Saturday, and seven hours on
Sunday. Our stores have extended hours during the holiday season.
Salon
A typical salon is staffed with eight to ten licensed salon professionals, including a salon manager, six stylists
and one or two estheticians. Our most productive salons have a guest coordinator and an assistant manager. Our
salon technical trainers and vendor education classes create a comprehensive educational program for
approximately 6,000 Ulta salon professionals.
Training and development
Our success is dependent in part on our ability to attract, train, retain and motivate qualified associates at all
levels of the organization. We have developed a corporate culture that enables individual store managers to make
store-level operating decisions and consistently reward their success. We are committed to continually
developing our associates and providing career advancement opportunities. Our associates and management
teams are essential to our store expansion strategy. We use a combination of existing managers, promoted
associates and outside hires to support our new stores.
All of our associates participate in an interactive new-hire orientation through which each associate becomes
acquainted with Ulta’s mission and values. Training for new store managers, prestige consultants and sales
associates familiarizes them with our beauty products, opening and closing routines, guest service expectations,
our loss prevention policy and procedures and our culture. We provide continuing education to salon
professionals and retail associates throughout their careers at Ulta. Our learning management system allows us to
provide ongoing training to all associates to continually enhance their product knowledge, technical skills and
guest service expertise. In contrast to the sales teams at traditional department stores, our retail sales teams are
not commissioned. Our prestige consultants are trained to work across all prestige lines and within our prestige
boutiques, where customers can receive makeup demonstrations and skin analysis.
Distribution
We operate three distribution facilities. The first facility, located in Romeoville, Illinois, is approximately
317,000 square feet in size, including an overflow facility. The second distribution facility is in Phoenix, Arizona
and is approximately 437,000 square feet in size. The third distribution center, located in Chambersburg,
Pennsylvania, opened in April 2012. The Chambersburg warehouse contains approximately 373,000 square feet.
We have embarked on a multi-year supply chain project beginning in 2014. This includes adding additional
capacity, with a fourth distribution center expected to open in 2015 in Greenwood, Indiana, a fifth distribution
center expected to open in 2016 in Dallas, Texas and system improvements to support expanded omni-channel
capabilities.
Inventory is shipped from our suppliers to our distribution facilities. We carry more than 20,000 products and
replenish our stores with such products primarily in eaches (i.e., less-than-case quantities), which allows us to
ship less than an entire case when only one or two of a particular product is required. Our distribution facilities
use warehouse management and warehouse control software systems to maintain and support product purchase
decisions. Store replenishment order selection is performed using pick-to-light processing technologies. Product
is delivered to stores using a broad network of contract and local pool (final mile) carriers. We fulfill
e-commerce orders from our Romeoville, Illinois and Chambersburg, Pennsylvania distribution centers.
10