L1 Retail is a differentiated investor with a longer-term investment horizon than many other financial investors. We seek to deploy capital into platforms that can be positioned for strong sustainable growth over 10 years and beyond. As a result, we favour investments which are exposed to long-term secular trends that have proven organic growth and/or which can be platforms for industry consolidation.

Over the course of the past 12 months, L1 Retail has established its market positioning, expanded its team to support its portfolio companies and invested in sustainable growth initiatives.

L1 Retail owns Holland & Barrett, which provides attractive exposure to the growing health and wellness market. It also owns 69.76% of Distribuidora Internacional de Alimentación S.A. (“DIA”), the Spanish food retailer.

L1 Retail owns Holland & Barrett, which provides attractive exposure to the growing health and wellness market. It also owns 69.76% of Distribuidora Internacional de Alimentación S.A. (“DIA”), the Spanish food retailer.

Investment approach

Established in December 2016, L1 Retail’s strategy is to identify and invest in companies that are well-positioned platforms for long-term growth and sustainable competitive differentiation. L1 Retail seeks investments where we can play an active role and leverage L1 Retail team’s prior investment experience, industry expertise and an extensive global retail network to successfully implement this approach.

We work in close partnership with management teams and place a strong emphasis on recruiting, developing and retaining top-tier talent. A key focus for any investment is to best position the business for it to react and take advantage of sector disruption driven by technology and digital innovation.

As a long-term investor, we are attracted to business models that are exposed to structural sector themes. We look to partner with sector leaders that operate in broad addressable markets and have strong customer value proposition. We believe customer focus and convenience provide long-term growth opportunities. As a result, we are attracted to the convergence of physical and digital retail, along with the conjunction of products and services.

We seek to invest up to $1bn of equity per platform. Our capital has a global mandate and can be invested in minority or control investments.

Stephan DuCharme

We believe customer focus and convenience provide longterm growth opportunities. As a result, we are attracted to the convergence of physical and digital retail, as well as the convergence of products and services

Stephan DuCharmeManaging Partner

In 2019, Holland & Barrett continued to develop within a growing health and wellness market and maintained its position as Europe’s largest health and wellness retail chain with over 1,000 stores across the UK, Ireland, the Netherlands, and Belgium.

Operational and Financial performance

The business achieved its 42nd consecutive quarter of like-for-like growth, ahead of the overall retail market, despite the challenges impacting the overall retail environment and the uncertainty of Brexit in its core UK market. Holland & Barrett has a strong and profitable store network and sees opportunity for further growth.

Short-term profitability this year has been impacted by investment in the business, in particular in technology, stores, and in the team. These investments added some short-term costs, but Holland & Barrett fully expects to reduce its costs in the coming year and drive stronger returns from investments. The new financial year started well, and Holland & Barrett has ample liquidity and resources at its disposal to continue to invest and drive the business forward.

Holland & Barrett is well positioned in the structural growth health and wellness markets and experienced strong growth in its core vitamins, herbals, minerals, and supplements categories and in online sales. The business has a long history of ethical and sustainable consciousness in sourcing, packaging, and in clean ingredients, which continue to be important to customers. 2019 saw the introduction of a number of new product categories in clean beauty, broadening the appeal of Holland & Barrett to new customers.

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Environmental, Social, and Governance

Environmental, Social, and Governance

Over the last few years, there has been a shift in high street retailers’ approach to sustainability. Holland & Barrett has been ahead of this curve. Its position at the forefront of the sustainable retail transition has seen it produce plans to reduce emissions and its use of plastics and waste, and it first launched their “Plan-it-Green” strategy on these issues in 2007.


In 2019, it became the first major retailer to ban wet wipes, recognising the damage they cause to water systems and the environment. It was previously the first retailer to abandon plastic bags in store, six years before a levy was introduced by the Government. The business has also invested in processes to significantly reduce waste, including enabling its Burton manufacturing site to obtain zero landfill status, six years before the government levy was introduced.

In 2020, Holland & Barrett will be working to reduce its carbon footprint as part of Britain’s journey to Net Zero by 2050. It is developing a new lower carbon, sustainable store format and is rolling out LED lighting across the store estate. It has also improved carbon emissions across its vehicle fleet.

The business is deeply committed to charity and community partnerships. During the COVID-19 crisis, Holland & Barrett donated thousands of products to local food banks and the NHS. It also partnered with Pennies, the micro-donations charity, to help drive fundraising through donations in store and online for NHS Charities Together. Holland & Barrett also offered a discount to NHS key workers to help them stay healthy and well. Profits from the sale of paper bags are donated to Rainbows Children’s Hospice. Holland & Barrett’s Healthy Hope foundation supports colleagues' local fundraising efforts with a focus on health and wellbeing; education relating to health, wellbeing, and the environment; and the protection and improvement of the environment.

The business is committed to diversity and inclusion with new colleague training modules introduced on gender and equality issues. Holland & Barrett has also trained Mental Health First Aiders across its stores, DC, and head office, and developed an ongoing programme of communications and support to colleagues.

Holland & Barrett continually reviews and updates its practices. As a responsible business, Holland & Barrett has reviewed all its supplier payment practices, particularly for small suppliers, to ensure that it is compliant with best practice.


In October 2018, it became clear that DIA was undergoing serious financial difficulties. In February 2019, L1 Retail, which owned 29% of the company at the time, announced a voluntary tender offer and comprehensive rescue plan to secure the future of DIA.

L1 Retail believed that under the right leadership and governance, DIA could deliver a transformation and re-establish its position in the Spanish retail market to the benefit of the Spanish consumer.

The L1 Retail rescue plan consisted of three integrated components. First, a voluntary tender offer (“VTO”) for the acquisition of all the shares in DIA that it did not already own at a price of €0.67 per share, a significant premium of 56.1% to the closing price on 4 February 2019. Second, a commitment to support a capital increase of up to €500m to achieve a viable long-term capital structure, which was conditional upon the completion of the VTO and reaching a satisfactory agreement with DIA’s lending banks. Third, a comprehensive transformation plan, led and overseen by L1 Retail, which was and is expected to deliver a turnaround of the business over a 3-5 year period.

On 17 May 2019, the National Securities Market Commission (the “CNMV”) officially announced that the offer had been accepted by a number of shares representing 40.76% of the share capital of DIA, which, together with those shares held by LetterOne before the offer, made L1 Retail a holder of 69.76% of the share capital of DIA.

In November 2019, DIA completed its capital increase by capturing €605m in the market and resulting in an increase in L1 Retail’s ownership from 69.8% to 74.8%. The successful capital increase reflected the financial markets’ endorsement of DIA and the L1 Retail-led turnaround plans, underlining stakeholders’ confidence in DIA’s future.

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