Ulta Beauty lands new partnership with Rihanna. Diversity is the key ingredient to the company's success, according to CEO.

• In the lastest installment of The Equity Talk, Insider spoke with Ulta Beauty CEO Dave Kimbell.
• Kimbell said investing in diverse beauty products has driven Ulta's recent financial success.

Ulta is the largest beauty retailer in the country — and that makes its CEO, Dave Kimbell, one of the most important people in business. With over 1,300 stores, an army of 40,000 associates, and massive ad campaigns that influence our perception of beauty, Kimbell sits at the top of a retail empire worth $21.5 billion.

Approachable and acutely self-aware (at least in speaking for this interview), Kimbell, who is white, is mindful of his privilege and the fact that he's not representative of Ulta's customer base, which overwhelming consists of women. So he's made it a top priority to listen to employees and customers from different walks of life.

And his strategy appears to be working. The makeup giant's stock is up nearly 50% from 2016. In addition to adding services like curbside pickup and growing its online strategy after stores were closed due to the pandemic, investing in diversity has been a key driver of success. On Thursday, music mogul and entrepreneur Rihanna announced she was partnering with Ulta, making her Fenty Beauty line available at the retailer starting March 6.

"Beauty is so emotional. By its very nature, beauty should be the ultimate in diversity," Kimbell told Insider. "The idea that everybody is beautiful, that's the key. We have a saying here that we've used in some of our advertising, which is, you don't come to Ulta Beauty to get beautiful, you come because you already are."

In 2021, Ulta invested $25 million to support beauty brands made by people of color and instituted mandatory anti-racist training for all associates to reduce bias. Kimbell also brought on actress and entrepreneur Tracee Ellis Ross as Ulta's diversity and inclusion advisor after partnering with her in 2019, putting her curly-hair product line, Pattern Beauty, on its shelves nationwide. On Thursday, Kimbell announced he is increasing diversity spending by another $25 million in 2022, doubling its commitment from last year. Funds will go to supporting Black-founded and Black-led beauty brands, Latin brands, and supporting entrepreneurs of color. Ulta will also launch an accelerator program focused on beauty brands created by people of color, and will work to promote diverse talent internally into leadership positions.

"To create an environment where everyone feels welcome and ultimately has an equal opportunity to express themselves through the world, that's my goal," Kimbell said. "Brands that aren't inclusive, I'd argue, aren't going to be successful in the long term."

In the latest installment of The Equity Talk, Insider spoke with the Ulta CEO about how he avoids performative allyship, the ways in which he's expanding the perception of beauty, and his vision for the company.

How did the racial reckoning of 2020 impact you as a leader, specifically as a white man?

It was a real moment for me to reflect on how I, as a leader, can help drive more positive change. One of the elements that I embraced was simply listening. I feel so grateful for the Ulta Beauty family coming together and leaning on each other and learning from each other. Many of our associates who are diverse across many dimensions came together and shared their stories.

We had sessions with our Black associates sharing experiences that I, as a white person, have never experienced. We listened to our AAPI [Asian American and Pacific Islander] associates speak about being threatened while simply walking down the street. We met with parents of transgender children and the experiences they had engaging with their children to discover who they are.

Many of these stories were painful to share. But they were also inspiring for us to imagine how Ulta can be even better. As America's largest beauty retailer, with 40,000 associates, it was a moment for me to say, "We need to learn from these stories and make sure we're driving change."

What made Tracee Ellis Ross the right fit to be Ulta's diversity and inclusion advisor? What are some tangible changes she's made within the company?

We're just so proud and pleased to be working with Tracee. She is simply an amazing person. It's been a pleasure to get to learn from her.

We first started working with her in 2019 with her brand Pattern. And as we went through the experiences of 2020 and George Floyd, it just became a natural discussion. We just started learning from her and found her to be such a great, insightful thought leader on how to drive more change. We just had a session with her two weeks ago where we brainstormed ideas on how to continue to make progress on our key diversity initiatives. We spoke about what else we can do for our BIPOC [Black, Indigenous, people of color] brands. She's willing to challenge us, push us, and also support us.

How are you avoiding performative allyship?

It's not just about putting the brand on the shelf or online. Just adding brands from diverse founders doesn't guarantee that these brands are going to be successful, that's true of any new brand. So we've spent time listening to Tracee's experience to make sure we can create an environment where emerging BIPOC brands are supported as they navigate the Ulta Beauty environment so they understand the supply chain, they're building branding, etc. Tracee is really helping us think through how we can build sustainable long-term impact.

What role has investing in diversity and inclusion played in Ulta's financial success this past year?

Self-expression and the choices anybody makes in how they bring themselves alive is so important in the beauty category. Our role is to provide an experience that is welcoming, inviting, inclusive, and allows every guest to discover their own possibilities through the power of beauty. That will drive our business forward. Diversity equity inclusion is not separate from our business strategies. It is inherently built into our vision and the way we believe we will be successful going forward through this idea of self-expression.

What does the future of diversity and inclusion look like at Ulta?

One of our focuses is elevating the level of representation across leadership, especially at the high level. Our board is majority women and 18% BIPOC. We've been working hard to find new ways to diversify our leadership, specifically by providing great avenues and opportunities for our Ulta Beauty associates and particularly our BIPOC associates to develop.

We are also working every day to create a welcoming, inviting, friendly, open, inclusive experience for our guests. So we'll continue to help our store teams through training to get rid of anything that may get in the way of that, any unconscious bias.

I also want to speak about our recent work with Modern Salon, a salon-industry publication, to put together the outlet's first issue featuring a transgender model on its cover. A transgender salon associate from Arizona helped with that. I think it's a good example of the work we're doing to ensure that we're creating an environment that allows everyone, including our transgender associates, to thrive.

We've got work ahead and there's a road ahead of us that we're gonna keep pushing hard on to make sure that we are doing everything we can to help be a positive influence in the world around us.

Correction: An earlier version of this story stated that Ulta was investing $25 million in 2022 to diversity and inclusion programs. The article has been updated to reflect that it is $50 million, $25 million more than 2021.

Editor's note: This article was originally published in December 2021.