MINNEAPOLIS — Target is getting ready to expand its rapidly evolving online beauty business with its planned acquisition of the DermStore Beauty Group.
The acquisition will further differentiate the company’s offerings in this particular retail segment. Following the transaction closing, DermStore will become a new, wholly owned subsidiary of Target. DermStore will continue to operate as a separate entity under its online name, DermStore.com. Although Target believes the transaction presents a strategic growth opportunity, there will be no material impact to Target’s 2013 results.
“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,” said Casey Carl, president of multichannel and SVP, 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.”
Dan Obegi, current CEO of DermStore, will be president of the wholly owned subsidiary and will report to 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 Obegi. “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. Wells Fargo Securities is serving as the exclusive financial adviser to DermStore on the transaction. Latham & Watkins LLP is serving as legal counsel to DermStore. Faegre Baker Daniels is acting as legal adviser to Target on the transaction.
The announcement follows Target’s recent acquisition of Chefs Catalog and Cooking.com earlier in 2013.