drugstore.com Acquires Beauty.com

Pharmacy site drugstore.com Wednesday
bought cosmetic site Beauty.com for
about $42 million in stock.

The acquisition will provide drugstore.com, which is paying 1.3 million in stock for the site, with access to a larger share of the $6.2
billion prestige beauty market. Beauty.com will operate as a sister
store to drugstore.com (DSCM), offering customers Beauty.com’s hundreds of prestige cosmetics and fragrance brands.

Beauty.com will remain its own separate brand, keep its URL and continue to
create its own merchandising, marketing and editorial content from its
current headquarters in New York. drugstore.com will lend operational
infrastructure, technology and order-related customer service to Beauty.com.

Beauty.com will also continue to expand its content, producing advice from
world-renowned beauty experts.

“What we wanted to do was something that was innovative that hasn’t been done before online, and that is expand our drugstore market to include prestige beauty brands,” said Debby Fry Wilson, spokesperson for drugstore.com.

“We had in mind women in the 25-50 age demographic who make beauty decisions for not only themselves, but for their whole families as well.”