Ocado has offloaded a beauty business to high street retailer Next in a move which bosses partly attributed to a strategic shift following its tie-up with Marks & Spencer.
Fabled by Marie Claire, a premium beauty store and website, has been acquired by Next in a deal which will be worth about £8 million to Ocado.
The high street retailer paid a small upfront fee and will pay at least £3 million 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 (JV) with Marks & Spencer, which is due to launch towards the end of next year.
“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 to sell 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.”