L1 Retail is a differentiated investor leveraging a strong track record in retail to buy and build the next generation of retailers internationally. We look for platforms that can be positioned for strong, sustainable growth over ten years and beyond.

Holland & Barrett (H&B)

2024 was a year of marked turnaround for H&B, with significant and consistent outperformance when compared with the general retail market and despite real pressures on the high street. H&B has the highest customer satisfaction levels on record, a settled and skilled management team and is delivering an ambitious plan for personalised wellness across digital and bricks and mortar.

The strategy is driven by three growth pillars:

  • Core market omnichannel retail growth: The UK & Ireland division focuses on delivering a fully integrated online and offline customer experience.
  • Developing their Wellness Solutions business: The Wellness Solutions & Transformation division reflects H&B’s commitment to innovation and future-led change, encompassing personalised wellness solutions and strategic initiatives.
  • International expansion: The International division drives growth in key global markets, leveraging customer insights and technical expertise to accelerate expansion.
In FY24, with the support of L1, H&B revenue growth continued to be strong YoY at £884mn. This represents a 9.7% increase in sales, driven by the ongoing business transformation. Their gross margin was strong at 59.2% (2023: 59.0%). Costs grew throughout the year, reflecting the continued investment in the growth strategy, coupled with inflation and conscious investment in their people as they continue to pay store colleagues at 5% above the National Minimum Wage. Adjusted EBITDA for the year was £86.2mn.

Moving ahead with purpose

As H&B moves forward, their purpose remains clear: to support the health and wellness of their customers while fostering an environment where their colleagues and communities can flourish.
This purpose and customer-first philosophy endures as the compass that guides everything they do. H&B research into customer trends and societal shifts has been pivotal in shaping their three-year transformation strategy, with FY24 being the first full year. By understanding the evolving needs of customers - whether in self-directed wellness, healthcare gaps, demographic change or advances in tech – they are increasingly well-positioned to deliver purpose alongside performance.
This considered approach has deepened their understanding of the market and enabled them to target solutions more effectively, from supporting preventative care to offering more personalised wellness to their customers.

 

L1 continues to show strong support for the strategy and investments being made by H&B in the delivery of its customer plan. These investments have enabled the company to make significant strides in improving the customer experience, helping them build stronger customer relationships and grow their brand perception among existing and new customers, including internationally.


Engaging colleagues: H&B continues to invest in its colleagues as they are at the heart of everything they do. This approach has led to a more engaged and motivated workforce.
  • From development and training to rewards and benefits, H&B are dedicated to ensuring their teams feel proud to work there and as a result is leading to customers getting higher-quality, informative and knowledge-based customer service and an improved overall customer experience.

Mission-led customer plan: H&B has been focused on improving the customer experience through its mission-led approach (spanning specialist areas including gut health, joint and bone health, immunity and family health), including as part of the overhaul of their store network.

  • To date, they have refitted over 60%of their salesforce space in the UK & Ireland and opened 36 new stores -with a further 47 refitted across the Benelux region - totalling roughly half a million square feet of retail space.
  • They have also extended their existing partnerships, adding more locations in Tesco, while developing and launching a number of new partnerships, including concessions with Next in 2024 and Ocado in 2025, as well as testing new concepts with Randox for potential broader work in the future.
  • The mission-led approach has enabled them to drive new digital pricing strategies, resulting in increased shopping frequencies and an expanding customer base.

Product and service innovation: H&B has step-changed how they lead with science, integrating curated, science-backed wellness solutions into every facet of their offering, all made possible by their team of in-house doctors, scientists and nutritionists.

  • They prioritised transforming their own-brand product portfolio, with strong focus on food and sport products, while laying the groundwork for innovation in our other key product categories like Vehicle Health Monitoring Systems (VHMS). This year, they expanded their own-label range with an additional 400 products, taking the total to over 1,000 new products over the past two years. Standouts include their revamped healthy food range, which saw a huge 34% increase in sales.
  • They developed and launched H&B&Me, a new behaviour change app backed by over 400mn person-years of clinical data and developed by a team of behavioural scientists and entrepreneurs. This award-winning app scores a user’s biological age and is designed to help them adopt healthier habits through personalised insights across nutrition, physical activity, emotional wellbeing and sleep.

Transforming their technology: H&B’s investment in technology, while closely complementing their customer-facing innovation, is also helping to reshape their entire operations by transitioning from legacy systems to more sophisticated platforms, enabling them to optimise the customer experience and fully modernise their supply chain.

  • They kickstarted the modernisation of their Burton distribution centre, with full automation and the adoption of in-house developed technology platform SIMBA for optimising inventory management.
  • They took decisive action to modernise their production facility to meet rising demand, rebranding it to the Global Production Centre and overhauling the equipment by installing new production lines to make it a hub that will drive efficiencies, increase output and enable faster delivery to markets worldwide.

International expansion: As H&B continues to evolve into a truly global health and wellness leader, its been a pivotal year in solidifying their international footprint. The International division has a presence in 21 countries, operating in over 300 H&B-owned and -franchised stand-alone stores, stocked in more than 2,000 retailer locations and localised H&B websites in 10 countries.

One of the most significant milestones this year has been establishing a H&B entity and team in Shanghai to accelerate their China cross-border growth, launching a range of products in the China domestic market, as well as facilitating local production in partnership with leading third party manufacturers.

H&B has built a stable executive and leadership team, aligned around clear targets, who are actively making choices on where to place their resources and focus and to ensure they are best placed to achieve near-term and mid-term growth ambitions. The management team also benefits from the strong support of its Board of Directors, which features a majority of experienced independent directors with relevant strategic skills to help H&B realise their strategic vision. The independent directors are complemented by a shareholder representative in the company’s Executive Chairman.

Dia

2024 marked the completion of a multi-year transformation of Grupo Dia. In 2024, Dia completed its simplification process with the sale of Clarel, its business in Portugal and Brazil. The company has a focused and profitable business built around two strong brands in Spain and Argentina. It has a winning customer value proposition built around proximity, a differentiated franchise model and a performance driven culture. It has deleveraged and refinanced its debt. It has set out an ambitious long-term strategic plan. It is communicating its story widely. Dia’s share price is improving. Over the last year, Dia has pivoted from a transformation to growth agenda and is accelerating its leadership as the proximity champion in Spain and Argentina.

Dia finished 2024 with 3,343 stores, sales of €6.9bn1 and an adjusted EBITDA of €292mn. These results were driven by strong growth in Spain – with sales growing by 15% from 2022 to 2024 despite 4% less stores. Adjusted EBITDA in Spain has doubled in two years due to growth in sales density and the reduction of operating costs. With improved earnings and the proceeds from asset sales and elimination of underperforming regions, net leverage had been reduced to 0.8x with maturities extended by five years. The business can now look past the operational and financial transformation of the last several years and turn decisively to a future of growth and market leadership based on its strategic pillars:

Exciting its customers: through an enhanced customer centric value proposition and driving loyalty and frequency to boost sales density.

Leading the market in profitable growth: by expanding its store network; improving the logistics network and pursuing inorganic growth opportunities.

Strengthening its winning foundation: by upgrading technology; continuing to build a performance-oriented culture and implementing its ESG strategy.

Sharing Dia’s story broadly and frequently: by reinforcing the Dia brand and implementing a progressive investor relations plan.

Dia is now firmly in a growth phase with an aligned, focused and confident management team committed to delivering sustainable long-term value for Dia’s shareholders. On 20 March 2025, Dia set out its Strategic Plan for 2025 to 2029 at its first Capital Markets Day in over five years. We have strong conviction in the business and its ambition to be the preferred food retailer in every neighbourhood and online and to lead the proximity market in Spain and Argentina.