Target in $350 million deal to sell online beauty retailer Dermstore

Target Corp. is selling a high-end skincare and beauty retailer it acquired in 2013 to a fast-growing U.K. e-commerce company. 

THG Holdings plc, also known as The Hut Group, has agreed to acquire Dermstore.com for $350 million in cash from Target. In a release, THG described Dermstore as the number one U.S. pure-play online retailer of prestige skincare and specialty beauty brands.

The deal comes as Target is about to embark on a major beauty initiative. In November, the discounter and Ulta Beauty entered into a deal to open Ulta-branded makeup and skincare shops inside hundreds of Target stores nationwide. Target will also offer an online version of the Ulta experience on its website.

THG’s acquisition of Dermstore will allow the British company, which owns several premium skincare and beauty lines, including ESPA, Christophe Robin, Grow Gorgeous and Illamasqua and others, to accelerate the growth of its own beauty brands in the U.S. market. THG also owns multi-brand beauty platform Lookfantastic.com and beauty box business Glossybox.com. In September, it acquired U.S. prestige skincare brand Perricone MD for $60 million. 

“THG’s stated ambition is to be the global digital partner of choice across the beauty industry, powering channel shift from offline to online,” the company said in a release.