Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
In a depressingly dry season for London initial public offerings, the prospect of retailer AS Watson’s planned $30bn dual listing is a welcome anomaly. And buried inside the Hong Kong group is another anomaly: Superdrug, a 62-year-old beauty and pharmacy chain that has somehow defied the ravages of age.
Superdrug made £1.6bn in sales in 2024, only about a fifth the size of chief rival Boots. But it has grown nearly twice as fast for the past four years, according to figures from Companies House filings. It’s also winning share: an annual growth rate of 4.5 per cent between 2014 and 2024 beats the UK health and beauty sector’s average. During that period, about 400 UK retailers went bust, according to the Centre for Retail Research.
One reason Superdrug has endured is that it offers the toiletries and cosmetics equivalent of fast fashion. It skews cheap and young, catering to a cohort of consumers swayed by TikTok. The chain has focused, for example, on the market for “dupes” — affordable, legitimate imitations of luxury products — helped, for instance, by its exclusive access to some viral products from dupe specialist e.l.f Beauty.
Unlike some other retail categories, there seems room for more than one winner in beauty retail on the high street. It’s also a category in which shoppers still frequent brick-and-mortar stores. Only about 17 per cent of UK health and beauty sales happen online, compared with more than a third across non-food retail, according to the British Retail Consortium KPMG Retail Sales Monitor.
That has made for one of the rosier corners of the high street. While general retail sales grew at about 1.3 per cent year on year in April 2026, retail sales of the “pharmaceutical, medical, cosmetics and toiletries” category are 18 per cent higher, according to the Office for National Statistics.
What might it be worth? Superdrug’s earnings increased at an annual rate of roughly 15 per cent from 2014 to 2024. Were that to have continued, it would spell £135mn of earnings this year. Put that on an 18 times multiple of forward earnings, in line with slower-growing US retailer Ulta Beauty, and Superdrug alone could be worth almost £2.5bn. That’s not bad for a business that was last sold as a standalone entity in 2001 for £280mn, or about £500mn in today’s money.
Even so, Superdrug is a small part of AS Watson’s mooted valuation. The group — itself part of Hong Kong conglomerate CK Hutchison — also owns more than a dozen other retail brands that investors in an IPO would have to size up. If the listing goes ahead, it will nonetheless be noteworthy in two ways: as a big win for London and a rare bet on a high-street success story.
[email protected]
