Brew Markets – August 18, 2025

Episode: What Ulta Breakup Means for Target & Soho House Goes Private in $2.7B Deal

Host: Anne Barry
Podcast: Morning Brew – Brew Markets

Episode Overview

In this episode, Anne Barry dives into three of the day’s most notable stock market stories:

1. The end of the Ulta Beauty–Target partnership and what it reveals about Target’s struggles in the retail landscape.
2. The $2.7B deal taking Soho House private, featuring insights on celebrity involvement, private equity, and hospitality-sector trends.
3. Major moves in the healthcare and pharmaceutical sectors, including Berkshire Hathaway’s new stake in UnitedHealth, and Novo Nordisk’s stock rally.
   The episode wraps up with a rapid-fire market roundup, highlighting solar, AI, and travel industry moves.

Key Discussion Points & Insights

1. Target & Ulta Beauty’s Breakup: What It Signals for Retail

• Target’s Existential Crisis

  • Anne sets the stage: Target faces a rough lead-up to its earnings—stock downgraded to “sell” by Bank of America.
  • The “existential crisis” theme is anchored in Target’s struggle to differentiate from Amazon and Walmart, with the Ulta Beauty partnership’s end serving as a striking symptom.

• Context on the Partnership

  • The partnership put Ulta outposts in 610 Target stores, beginning in 2021 to boost both brands post-COVID (01:30).
  • Anne points out the beauty sector’s resilience: “There’s major money in this sector... Well, to start with, it is massive, with roughly $700 billion of market value globally. And it's resilient. It spended off recessions with something called the lipstick effect.” (01:37)

• Diverging Signals from Leadership

  • Target CEO (audio from March): "Now we've nearly doubled the size of our beauty business since 2019." (02:16)
  • Ulta CEO Keisha Stillman in April: Partnership expansion “on pause to drive efficiencies and leverage the learnings that we've had to really unlock value.” (02:35)
  • Anne’s take: Ulta is retrenching to focus on its own growth, possibly finding Target “not cool enough.”

• Deeper Analysis

  • Anne speculates the partnership ended because Target lost its “cool” factor, which is critical in retail’s age of Amazon and Walmart dominance.
  • Notable Quote – Anne Barry (03:28): “If I'd been Ulta CEO Keisha Stillman, I would have been tempted to stop investing in front-peak Target, too, to focus my energy on getting my Ulta back to being retail’s beauty queen again.”

2. Berkshire Hathaway’s Investment in UnitedHealth: Vote of Confidence or Risky Bet?

• The Move

  • Berkshire disclosed a $1.4B stake in UnitedHealth—five million shares as of June 30 (04:47). Stock surged over 24% in five days, its best run since 2009.
  • UnitedHealth context: Once a $550B behemoth, now reeling from executive scandals, CEO shake-ups, and federal investigations.

• Why It Matters

  • Anne underscores Berkshire’s reputation: “Berkshire is, in the eyes of the market, the gold standard for investing in the long term in stable cash flowing companies with an edge.” (06:31)
  • UnitedHealth’s troubles make the investment a strong market signal—a reason for re-examination, despite risks.

• Risks & Leadership Moves

  • New CEO Stephen Hemsley invested $25M of his own funds in May (06:26), further boosting credibility.
  • Ongoing DOJ fraud investigation; recent Medicis acquisition brings integration risk.

• Notable Moment

  • Anne on FOMO: “It is so easy to get FOMO, especially since several hedge funds also disclosed that, like Berkshire Hathaway, they bought United stock in the spring. And you don't always get long-term investors like Warren Buffett and hedge funds... aligning in the way that they have on this name.” (07:20)

3. Soho House Goes Private: Private Equity’s New Hospitality Play & Celebrity Board Seats

• Rebecca from Austin (Listener Question)

  • “I read that Soho House is going private with Ashton Kutcher involved… so why should we care?” (08:11)

• Soho House’s Journey

  • IPO'd in 2021, grew to 46+ locations worldwide, but has languished below IPO price due to lack of profitability (09:21).
  • $9/share buyout price means small gains for long-term holders, compared to sub-$7 trading range.

• Challenges of Public Turnarounds

  • Anne: “It's very hard for companies to do turnarounds while they're public. There is scrutiny from the market every single quarter…real progress can take years.” (10:09)

• Who’s Buying

  • Private equity fund Yucaipa, founder Nick Jones, Ashton Kutcher (board), and hotel operator MCR (the new controlling buyer) (10:47).
  • MCR’s move seen as diversification — a trend sweeping the hospitality industry.
  • Notable Moment – Anne: “All the hospitality players... are all moving to diversify. That’s what I’m watching. And this is just a sign of the next wave to come.” (11:23)

• Wider Diversification Trend

  • Hilton into vacation rentals/timeshares, Waldorf Astoria into river cruises, Four Seasons and Ritz-Carlton into yachting.
  • Even Airbnb plans to move “significantly more aggressively into hotels” per its latest earnings call (12:09).
  • Anne: “Diversifying is the way it’s doing it.”

4. Novo Nordisk, GoodRx & The GLP-1 Weight Loss Race

• Novo’s Recent Moves

  • FDA approves Wegovy for MASH (liver disease).
  • Partnership with GoodRx: 50% discounts on Ozempic and Wegovy for uninsured patients (12:35).

• Industry Backdrop

  • Novo’s stock down ~60% from the prior year, multiple executive shakeups, and production shortfalls despite $10M+ US users (13:30).
  • Telehealth pharmacies produced “copycat” compounded versions; led to difficult partnerships (notably with Hims & Hers).

• Competitive Landscape

  • Morgan Stanley sees US GLP-1 users doubling by 2035 (13:50).
  • Fierce competition from Eli Lilly’s Zepbound.

• Market Reaction

  • Novo Nordisk: +4% share price
  • GoodRx: +40% surge (14:29)

Market Close & Quick Hits

• Meta: -2%, overhauling AI operations for the fourth time in six months; Anne: “Starting to look like chaos over there at Meta.” (15:17)
• Solar Stocks: Up 20–30% (Sunrun, SolarEdge, NextTracker) after federal tax credit clarity (15:48)
• TerraWolf: Bitcoin miner/AI operator, up 10% after additional Google investment (16:13)
• Index Performance: S&P 500, Nasdaq, Dow all flat amid global uncertainty (Ukraine/peace talks) (15:29)
• Palo Alto Networks: Earnings just released—more on tomorrow’s episode (17:12)

Notable Quotes & Memorable Moments

• Anne Barry, on Target’s problem (03:28):
  “If I’d been Ulta CEO Keisha Stillman, I would have been tempted to stop investing in front-peak Target, too, to focus my energy on getting my Ulta back to being retail’s beauty queen again.”

• Anne Barry, on public-to-private turnarounds (10:09):
  “It's very hard for companies to do turnarounds while they're public. There is scrutiny from the market every single quarter for signs of improvement, when realistically, it can take years to show real progress.”

• Anne Barry, on hospitality trends (11:23):
  “All the hospitality players... are all moving to diversify. That’s what I’m watching. And this is just a sign of the next wave to come.”

• Anne Barry, skeptical on Meta’s churn (15:17):
  “Four overhauls in six months. Starting to look like chaos over there at Meta.”

Important Timestamps

| Segment | Timestamps | |----------------------------------------|-------------| | Target & Ulta Beauty Breakup | 00:31–03:40 | | UnitedHealth & Berkshire Hathaway | 04:47–07:50 | | Soho House Goes Private | 08:11–12:30 | | Novo Nordisk, GoodRx, GLP-1s | 12:35–14:29 | | Market Close & Quick Hits | 15:07–17:12 |

Episode Tone & Style

Anne Barry mixes sharp sector expertise, market skepticism, and conversational wit, addressing big trends while grounding them in what investors can use. Listeners benefit from nuanced takes and digestible examples, making complex financial maneuvers relatable and actionable.