Next buys Ocado beauty business in £8m deal
Ocado boss Tim Steiner said the sale made sense, as the joint venture with M&S brings "a centre of gravity shift" for the company.
Wednesday 19 June 2019 17:29, UK
Ocado has sold off a beauty business to high street retailer Next following the grocery delivery company's joint venture with Marks & Spencer.
Beauty store and website Fabled by Marie Claire has been acquired by Next in a deal that will be worth about £8m to Ocado.
The high street retailer paid a small upfront fee and will pay at least £3m as part of an earnout agreement, giving Ocado a cut of sales for the four years to 2024.
Tim Steiner, chief executive of Ocado, said the decision was a result of the new joint venture with Marks & Spencer, which is due to launch towards the end of next year.
The companies announced the £750m pact in February.
M&S said it was paying for a 50% share of Ocado's UK retail arm, which would trade as Ocado.com, and provide delivery for M&S food, from September 2020 at the latest.
"The recent JV with M&S has meant that the centre of gravity at Ocado Group has shifted," he said.
"In the light of our strategic evolution, and given the success of the collaboration between Next and Fabled, we decided that it would be in the best interests of all parties to now pass the baton so that Next can take Fabled forward.
"We wish them all the best in this endeavour."
Next has already been collaborating with Fabled over the past eight months, selling more than 100 beauty brands through next.co.uk including Smashbox, Burberry and Estee Lauder.
Simon Wolfson, chief executive of Next, said: "Fabled's experience and expertise bring an opportunity for the Next Group to develop an extensive premium beauty business supported by our online and retail platform."
Marie Claire and Ocado launched Fabled as a joint project in 2016, opening a concept store in London that year as well as the website.
Amanda Scott, managing director of Fabled, said: "We now have an exciting opportunity to combine complementary capabilities with Next which will enable us to accelerate our plans for developing and extending the range, services and channel offer.
"We look forward to the continued growth and success of Fabled by Marie Claire as part of the Next Group."