Adore Beauty has snapped up Ikou, a wellness and skincare brand, for $25 million as the online beauty retailer attempts to build a more lucrative private label business.
The company told investors that the purchase – for an upfront $20 million, with $5 million due in 18 months – was an “ideal strategic fit”. Ikou, established in the Blue Mountains 17 years ago by Naomi and Paul Whitfeld, sells organic skincare, bath and body, home fragrance and herbal tea products through its three shops in NSW.
“The brand’s extensive product range accelerates private label share of revenue, improves our margin profile, and provides our first store footprint across three premium locations.”Ikou has three stores – in the Blue Mountains, Sydney and Byron Bay – as well as an online shop and wholesale agreements with spas and retailers.The company is searching for a new chief executive after Ms Morton flagged she would leave later this year for personal reasons.
Adore was floated at $6.75 a share three years ago, exceeding its prospectus forecasts. But its market capitalisation has fallen dramatically amid higher costs and lower margins. Its private label strategy is targeted at lifting those margins. Last year, it reported a loss of $600,000 on revenues of $180.6 million.from executive duties last year, but retained their board seats. They each control 11.05 per cent of Adore’s register, while Quadrant Private Equity still has a major stake at 32.
The company said in April that conditions were expected to remain challenging for the remainder of this financial year as higher interest rates put pressure on household budgets. It is aiming for earnings margins of between 2 per cent and 4 per cent.is a senior journalist covering retail/consumer goods. She previously covered healthcare/biotech. Carrie has won multiple awards for her journalism including financial journalist of the year from The National Press Club.
Source: Healthcare Press (healthcarepress.net)
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