Target to acquire skin care retailer DermStore.com
The venture will also further differentiate Target’s offerings in the cosmetics segment and also present a strategic growth opportunity as the online brand becomes its new, wholly owned subsidiary, meaning it will continue to operate as a separate entity under its online name.
"There is no doubt that the online beauty industry is growing rapidly, and this unique opportunity enables Target to gain insight into the superior, online customer experience DermStore provides," says Casey Carl, president of Multichannel and senior vice president, Enterprise Strategy, Target.
"Not only will DermStore's 750-plus brands offer Target expanded breadth across the beauty and skincare industries, but also access to exceptional content and helpful resources we know consumers want," she adds.
Dan Obegi, current CEO of DermStore, will be president of the wholly owned subsidiary and will report to Mr. Carl.
"DermStore's success was built on understanding the beauty market and catering to a shopper who's seeking a wide array of prestige products, exceptional service and product expertise," said Dan Obegi, current CEO of DermStore.
"Our customers have come to trust us to consistently deliver a quality experience and we are confident that this acquisition will benefit Target's guests and expand Target's online market share."
The transaction is expected to close within 60 days. Financial terms are not being disclosed. This announcement follows Target's recent acquisition of CHEFS Catalog and Cooking.com earlier in 2013.
The 26,000 products and 750 brands DermStore sells, and its expertise in selling them online, will help Target expand its share of online sales in these categories, the retailer says.
Target did not say how much it will pay for Dermstore. Target is No. 18 in the 2013 Top 500 Guide. DermStore is No. 279.
“There is no doubt that the online beauty industry is growing rapidly, and this unique opportunity enables Target to gain insight into the superior online customer experience DermStore provides,” says Carl.
“Not only will DermStore’s 750-plus brands offer Target expanded breadth across the beauty and skincare industries, but also access to exceptional content and helpful resources we know consumers want.”
Top 500 e-retailers selling in the health and beauty category had combined web sales in 2012 of roughly $274.9 billion, up slightly from $2.748 billion in 2011, and up 42.8 percent over the last decade from $192.4 billion in 2003, according to Internet Retailer estimates.
DermStore had 2012 web sales of about $56.5 million, up 10.1 percent from $51.3 million in 2011.
