Target Corp. has agreed to sell its online beauty and skin care business unit Dermstore to British e-commerce company THG Holdings for $350 million in cash. THG Holdings expects to receive antitrust clearance for the deal from US regulators in January 2021.
Target (TGT) had acquired Dermstore in 2013 to expand its beauty business. Dermstore offers beauty products and cosmetics subscription services through an online platform. The online personal care retailer sells nearly 350 different brands in its product lineup.
THG Holdings (THG) commented, “THG will be able to increase the scale of its beauty box business by accessing the Dermstore.com customer base, which will in turn unlock incremental marketing revenue. The Dermstore.com acquisition also provides the opportunity to accelerate the growth of THG’s own beauty brands via a new and large US customer base.”
On Nov. 18, Guggenheim analyst Robert Drbul reiterated a Hold rating on the TGT stock as he believes that it is fairly valued at current levels. Drbul is looking for a “better entry point for the shares.”
From the rest of the Street, the stock scores an analyst consensus of a Moderate Buy based on 13 Buys and 5 Holds. (See TGT stock analysis on TipRanks).
With shares up 36.5% year-to-date, the average analyst price target of $193.12 implies additional upside potential of 10.3% to current levels.
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