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Published January 4, 2021
Published January 4, 2021

Hot off a $7 billion IPO and the acquisition of the Perricone MD brand for $60 million in September, The Hut Group is buying Dermstore from Target Corp in a $350 million cash deal.

WHO: Dermstore was founded in 1999 by board-certified dermatologist Craig A. Kraffert with the aim of making professional-grade skincare accessible. The site offers curated content, and with a portfolio of prestige and professional skincare products as well as cosmetics and haircare, it is considered a destination for professional skincare brands. In a 2013 transaction, Dermstore become a wholly owned subsidiary of Target, while operating as a separate entity.

The Hut Group (THG) was founded in 2004 by Chief Executive Matthew Moulding and CFO John Gallemore, retails more than 8,000 brands, and operates more than 160 localized websites across 35 languages and 42 currencies. THG has become one of Europe’s largest online retailers of premium beauty brands. Other holdings include Eyeko, Illamasqua, ESPA, SkinStore, RY, Glossybox,, and Grow Gorgeous, Ameliorate, Acheson & Acheson, Christophe Robin, and Perricone MD.

WHY: THG said that with its stated ambition to be the global digital partner of choice across the beauty industry, powering the channel shift from offline to online, the acquisition boosts its strategy. It also “substantially enhances” its relationships with key global beauty brands while speeding up the growth of its own brands through Dermstore’s large US customer base.

IN THEIR OWN WORDS: Chairman and CEO Matthew Moulding said: “A key driver behind the decision to list THG on the London Stock Exchange just over three months ago was to enable the group to make major global investments, such as Accessing capital through a London listing has enabled us to accelerate our growth plans and build out a global leadership position within the exciting beauty industry. We are delighted to welcome into our growing portfolio of online beauty assets.”


  • The Hut Group bought Dermstore from Target for $350 million in cash.
  • Dermstore will contribute to 11 months of THG’s 2021 financial year, adding sales of around $180 million and adjusted EBITDA of approximately $4 million.
  • Beauty makes up about two-fifths of sales, with nutrition accounting for about one-third.
  • Sales in the UK and Europe accounted for almost 60 percent of THG’s £1.1bn revenue last year.
  • At the completion of this deal, 20 percent of THG’s sales will come from the US market compared to the current 13 percent.
  • For the second time since listing in September, THG increased its full-year revenue forecast in early December to a £1.57-£1.60 billion range, compared with £1.48-£1.52 billion previously.
  • Through delivery of planned synergies, management said it expects adjusted EBITDA margins to increase “and move in line with group adjusted EBITDA margins” within 18 to 24 months post-acquisition.
  • Target acquired Dermstore in 2013 in an effort to increase its share of the evolving online beauty market.
  • The deal is subject to regulatory approval in the US, which is expected in late January.
  • THG acquired the Perricone MD brand for $60 million in cash in September.

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