Russian billionaire buys health food chain Holland & Barrett in £1.8bn deal

● New owners targeting larger slice of the £10bn health and wellness market

Health food chain Holland & Barrett has been snapped up for £1.8 billion by a retail investment fund controlled by Russian billionaire Mikhail Fridman.

L1 Retail, part of the tycoon’s holding company Letterone, has acquired the retailer from its parent firm Nature’s Bounty, which is owned by private equity firm Carlyle.

Founded in 1870, it is now Europe’s largest health food chain, has outlets in more than 1,150 locations and employs a workforce of more than 4,200. Headquartered in Nuneaton, Holland & Barrett’s annual revenues in 2016 exceeded £610 million.

L1 Retail’s managing partner Stephan Ducharme said: “Holland & Barrett is a clear market leader in the UK health and wellness retail market, with attractive growth posi- tions in other European and international markets, and growing online presence, with a leading customer loyalty programme and 10 million active cardholders.”

He added that the group will look to take a bigger slice of the growing £10bn health and wellness market, adding that L1 Retail will continue to work with Holland & Barrett chief executive Peter Aldis.

Aldis said: “We have upgraded much of our core store portfolio to concept stores to deliver additional in-store theatre and increased customer engagement.

“New products launched through our ethical sourcing programme have also been a key growth driver.”

Led by Ducharme, L1’s advisory board is made up of Karlheinz Holland and John Walden, the former bosses of Lidl and Home Retail Group respectively.

They are joined by Clive Humby, co-founder of customer data company Dunnhumby.

As well as its store network, the company has invested around £30m in recent years in online and mobile technology and now ships products to more than 30 countries,

It also operates an international franchise operation with outlets in countries including China, Singapore and UAE.

Last week reports emerged that the Hong Kong-based retail giant that owns Superdrug was plotting a £1bn-plus takeover of the business. AS Watson Group was said to have tabled an indicative offer for the chain.

The takeover is the latest in a string of acquisitions of UK firms by foreign bidders following the Brexit vote and the fall in the pound.

Last year Stirling-based insulation maker Superglass was bought by Russian roofing billionaire Sergey Kolesnikov.