Russian billionaire, Mikhail Fridman’s L1 Retail investment vehicle has agreed to buy British retailer, Holland & Barrett, for £1.77bn (€2.01bn), in its first acquisition, betting on continued growth and expansion abroad for the health foods chain.
L1 Retail, part of Mr Fridman’s empire, which spans investments from ride-hailing firm, Uber, to North Sea assets, said it expected to complete the purchase from Nature’s Bounty and the Carlyle Group by September, subject to regulatory approvals.
Britain’s retailers face an uncertain future, with consumer spending slowing and online competition picking up.
Luxury clothing chain, Jaeger, went into administration in April, while dealmaking has also been on the rise, with Brazil’s Natura set to buy The Body Shop from L’Oreal.
However, some industry experts think healthier foods could prove resilient, with online giant, Amazon.com, agreeing to buy US chain, Whole Foods, for $13.7bn earlier this month.
Researchers, Euromonitor, reckon the health and wellness market grew 4.8% a year between 2011 and 2016, reaching a total value of $704bn last year.
Holland & Barrett, whose products range from vitamins and homeopathic remedies to ‘free from’ foods for allergy sufferers, says it has grown same-store sales for 32 consecutive quarters, with revenues topping £610m in 2016.
While focused mainly in Britain, the 1,000-plus store chain has been expanding abroad, as well as online, thereby catching L1 Retail’s eye.
“We believe that the company is well-positioned to benefit from structural growth in the ... health and wellness market and has multiple levers for long-term growth and value creation,” said L1 Retail managing partner, Stephen DuCharme.
Holland & Barrett was founded in 1870, but began trading in health and wellness in 1920, when Samuel Ryder — who went on to sponsor the golf tournament that bears his name — set up a herb company.
Private equity firm, Carlyle, acquired Nature’s Bounty, including Holland & Barrett, in 2010, for $3.8bn.
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