The online beauty industry is growing by leaps and bounds, and
) intends to leave no stone unturned in making the most of this
booming market. This is evident from its latest deal to acquire
DermStore Beauty Group, an online beauty retailer that would
further strengthen its footprint in this segment by enhancing its
portfolio of offerings. The financial terms of the deal, which is
expected to conclude within 60 days, were not revealed.
Target hinted that DermStore, which will become a wholly owned
subsidiary, will sustain its operation under the name
DermStore.com. The transaction, which is strategically important
in the long run, amid a sluggish, competitive economic
environment, is not expected to have a favorable impact on the
company's fiscal-2013 results.
The current CEO of DermStore, Dan Obegi, will spearhead the
wholly owned subsidiary and directly report to Casey Carl, the
President of Multichannel and Senior Vice President, Enterprise
Strategy at Target.
Founded in 1999, DermStore offers its products through the
online platform targeting approximately 1 million active
consumers. The website showcases more than 26,000 SKUs and 750
brands such as SkinMedica, SkinCeuticals, Obagi and Dermalogica.
The company in order to extend its wings in the cosmetics and
hair care market recently launched two more websites,
hairenvy.com and blush.com.
Target, in order to augment its presence in key markets, has
been attempting to acquire small businesses and DermStore is the
latest addition. Earlier, in March Target entered into 2 separate
transactions to acquire CHEFS Catalog and assets of Cooking.com
to tap the rapidly expanding cooking and kitchenware market.
Going forward, this Zacks Rank #4 (Sell) stock intends to
focus on its core businesses. The company plans to sustain its
remodeling program at existing general merchandise locations by
the addition of an expanded food section along with a greater
assortment of dry dairy and frozen items, improved store layout
and enhancement of in-store shopping experience across
departments, such as apparel, home, beauty, shoes and baby.
Alongside, Target is seeking promising expansion opportunities
in international markets such as Canada and Latin America.
Recently, the company revealed its plans to introduce
smaller-format stores called CityTarget, similar to that of its
Wal-Mart Stores Inc
Moreover, Target announced its year-round price matching
policy with the aim of offering its patrons the facility to match
the prices offered by online retail giants.
The company will match prices with
) Amazon.com, Wal-Mart's Walmart.com,
Best Buy Co. Inc
) BestBuy.com, and Toysrus.com. Target believes that its price
matching policy coupled with the REDcard reward program would
provide it an edge over its competitors.
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