Buying Australia’s Jurlique — the first full-scale overseas M&A (2011)

The multi-brand vessel, and the recurrence of write-downs

At the bottom of this acquisition was the agility the holding-company vessel had brought. With the capital raised at listing, the group could take on a whole established brand at once — an overseas pillar that would have taken years to build in-house. By the logic of the vessel, buying Jurlique can be read as a reasonable choice. But sales that leaned heavily on Chinese inbound demand, together with the difficulty of putting down local roots, wore away the value of the purchased pillar year by year. The result — record sales and operating profit even as net income sank — seems to concentrate the price of overseas M&A into a single set of accounts.

Jurlique’s impairment did not end as a one-off failure. Afterward came the exits from Amplitude and ITRIM and the goodwill write-down on the acquired FUJIMI — scenes in which businesses taken into the holding company’s vessel were folded up in impairment, over and over. The strength of moving many brands in and out at will stands in a front-and-back relationship with carrying, in each brand held, the seed of a write-down. A design to buy and nurture keeps folding back into accounts that buy and fold up — what Pola Orbis got from its first overseas M&A may have been less the overseas pillar itself than tuition in multi-brand management.