The BWX Ltd (ASX: BWX) share price is up more than 3% after news of a partnership with THG.
BWX is a natural beauty business which owns various brands including Sukin, Andalou Naturals and Mineral Fusion.
What’s the partnership?
THG Ingenuity is a global tech platform which specialises in taking brands direct to consumers. It offers BWX an ‘end to end’ e-commerce solution and full service supply chain to build more scale for BWX’s brand portfolio across Europe and Asia.
BWX said that this will help take brands direct to consumers, to grow BWX brands in key engine markets.
The partnership will be for an initial five priority markets, with an increase to 14 markets by FY22.
BWX has previously announced it was aiming for revenue of between $30 million to $50 million for the European region by the end of FY22.
There are a few things that BWX will be working on with THG.
Goals of the partnership
It’s aiming to expand the Sukin brand across all important sales channels including supermarkets, European drugstores and e-retailers with Andalou Naturals to follow in FY22.
BWX will also aim to increase brand activity with direct to consumer channels to enhance the European shopper experience, targeting five markets in FY21.
The last point that BWX is targeting is ‘re-positioning’ the Sukin brand for the European market, maximizing the Australian provenance (where it comes from) and the A-beauty trend across Europe.
BWX chief operating officer Rory Gration said: “Combining BWX’s house of natural brands and insights with THG’s digital brand services, cross-border expertise and sophisticated technology means we can build more meaningful brand footprints in what is a fast-evolving retail environment.”
Summary
This seems like a smart move, if BWX thinks it’s what is needed to get to the next level with its European and Asian goals. BWX has an enormous addressable market, but it’s not easy to build market share. This could be a key to unlock those international markets.
Looking at the current BWX share price, it’s valued at just over 20 times the estimated earnings for the 2023 financial year, according to CommSec. I think it’s at a pretty decent price for a long term buy considering the international growth plans, the rising margins and the new manufacturing facility.
But there are other ASX growth shares I’d rather buy first such as Pushpay Holdings Ltd (ASX: PPH) which seems to have even more operating leverage.
