It’s a bit of an understatement to describe Wesfarmers as a titan of the Australian retail scene. The owner of Bunnings, Officeworks, Kmart and Target became a major player in the health and beauty category with last year’s acquisition of Priceline parent company Australian Pharmaceutical Industries (API) for $764 million.
The $70-plus billion conglomerate is poised to expand its presence in the cosmetic treatment market and has made a bid for Silk Laser Clinics valued at $169 million.
Silk Laser Clinics has been on a tear in recent years as Australians have spent up big on injectables, anti-ageing and hair removal treatments. Founded in 2009, the network has expanded from one store in Adelaide to 140 locations nationwide.
It’s not the first foray into the lucrative sector for Wesfarmers. As part of the API purchase, the company acquired Clear Skin Clinics, the leading skin and hair removal specialists, and created a new Wesfarmers Health division. The Priceline business has also seen significant growth in health and beauty over the first six months of the current financial year.
Silk Laser Clinics share price soared 20 per cent following the offer from Wesfarmers. The board and a leading investor, Wilson Asset Management, are strongly in favour of the deal unless a better offer emerges over the next month.
Founder Martin Perelman notes that Australia’s non-surgical cosmetics industry continues to perform well in spite of cost of living pressures. With the backing of Wesfarmers the company and its franchisees would have even stronger support to increase growth and profitability.
Both Wesfarmers and Woolworths have intensified their presence in health and wellness. The supermarket chain’s Healthy Life division has been building increasing heft in the beauty supplies and vitamins sector.
Just before API accepted Wesfarmers buyout offer, Woolworths were also in the running with a potential $850 million bid but decided to drop out of the race.
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