The news: More retailers are joining forces to expand their reach and drive sales in a challenging environment.

• Bath & Body Works will sell a selection of body care and home fragrance products in over 600 Ulta Beauty stores and the retailer’s website starting on July 12.
• Nordstrom partnered with FAO Schwarz to sell a curated assortment of toys in stores and online and to open dedicated shop-in-shops featuring immersive experiences and live toy demonstrations.
• Staples is bringing Party City into over 700 of its stores and its website, with more locations planned.

The strategy: For Bath & Body Works and FAO Schwarz, the partnerships represent an opportunity to reach engaged shoppers and increase distribution points.

• In Bath & Body Works’ case, the company is relying on its Ulta presence to complement its existing store footprint and help it return to growth.
• For FAO Schwarz, the deal with Nordstrom gives it an opportunity to become a larger player in the toy space, while Nordstrom can use FAO Schwarz’s assortment and experiential activations to drive store traffic.

However, the rationale is less clear for Staples. The company claims that its Party City deal will enable it to become a “single destination for a wide range of personal and professional occasions,” but there are plenty of other retailers that offer similar products—including Michael’s, which moved quickly to take advantage of Party City’s bankruptcy. Nor does the partnership have a clear excitement or uniqueness factor to draw shoppers to Staples.

Implications for retailers: Companies have to choose their partners carefully. Retailers should look for complementary opportunities similar to the tie-up between Best Buy and Ikea, which works because it takes advantage of the natural fit between the two companies’ offerings. Likewise, the partnership between FAO Schwarz and Nordstrom is mutually beneficial because it gives FAO Schwarz broader reach while strengthening Nordstrom’s appeal as a retail destination. But deals like the one between Staples and Party City are less likely to bear fruit, unless retailers offer compelling merchandise or in-store experiences.

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