The move will allow THG to tap a new and large U.S. customer base for its brands. U.S. regulatory approval is expected in late January.

THG Holdings Ltd., a British ecommerce operator that sells beauty and nutrition products, agreed to buy Dermstore LLC as it expands its reach in the U.S.

THG is acquiring the retailer of high-end skincare and specialty beauty brands for $350 million in cash from Target Corp. (No. 12 in the 2020 Digital Commerce 360 Top 1000), according to a statement Tuesday.

The move will allow THG, whose sales have been boosted by the ecommerce boom amid Covid-19 lockdowns, to tap a new and large U.S. customer base for its own brands. It also comes after the company raised 1.9 billion pounds ($2.6 billion) in September in one of Europe’s biggest initial public offerings this year.

The deal will add about 135 million pounds ($182.20 million) in sales to THG, previously known as The Hut Group. U.S. regulatory approval is expected in late January.

The company also said it is buying its U.K.-based nutrition product suppliers Claremont Ingredients and David Berryman.

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A stock such as THG “is a very rare commodity in the U.K., it attracts a lot of interest and it ends up trading on a very high rating,” Colin Morton, a portfolio manager at Franklin Templeton Investments, told Bloomberg News.

On Dec. 20, THG Holdings and Poland’s Allegro.eu SA  gained entry to the STOXX 600, an index of European stocks. The additions mean passive investors who track the STOXX 600 benchmark must  bolster their holdings of two stocks that are already in limited supply.

Index membership helps validate the view of investors who have been focusing on the growth of ecommerce firms during the Covid-19 pandemic, while at the same time betting on their potential to enter major stock indexes. Both shares have soared above their initial public offering prices, with THG gaining around a third in value and Allegro roughly doubling.

“Online has been a big winner this year as a result of the pandemic and the addition of e-commerce stocks rebalances the index to reflect that growth,” Bernstein analyst Aneesha Sherman told Bloomberg News. “THG is a unique business model that includes retail, brands and B2B technology, while Allegro is more of a typical third-party platform.”

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