MINNEAPOLIS - August 6, 2013
DermStore to become new wholly owned subsidiary in e-commerce deal
Target Corp. (NYSE: TGT) today announced an agreement to acquire the DermStore Beauty Group. The acquisition positions Target to expand its share of the rapidly evolving online beauty market and will further differentiate the company’s offerings in this important 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. Target believes this transaction presents a strategic growth opportunity; however, there will not be any 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 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.”
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; more information on that transaction is available here http://pressroom.target.com/news/target-to-expand-cooking-and-kitchenware-business-with-two-e-commerce-acquisitions.
DermStore is the leading and fastest growing independent skin care e-commerce site in the United States with a comprehensive portfolio of prestige and professional products offered to over one million active customers. The Company was founded in 1999 by a board certified dermatologist and features over 26,000 SKUs and 750 authorized brands such as SkinMedica, SkinCeuticals, Obagi and Dermalogica. The company recently launched two additional websites, hairenvy.com and blush.com, extending its reach to cosmetics and hair care.
Wells Fargo Securities, LLC is serving as the exclusive financial advisor to DermStore on the transaction. Latham & Watkins LLP is serving as legal counsel to DermStore.
Minneapolis-based Target Corporation (NYSE: TGT) serves guests at 1,856 stores – 1,788 in the United States and 68 in Canada – and at Target.com. Since 1946, Target has given 5 percent of its profit through community grants and programs; today, that giving equals more than $4 million a week. For more information about Target’s commitment to corporate responsibility, visit target.com/corporateresponsibility.
Faegre Baker Daniels LLP is acting as legal advisor to Target on the transaction.