The Straits Times / The Business Times News on OSIM

Osim and Brookstone: a synergistic partnership

They share values like an emphasis on the quality of their products, people

BOYS like their toys, and they will soon have a store wholly dedicated to their fancies in Asia, come year-end.

This is the result of healthcare group Osim International's US$456 million acquisition of Nasdaq-listed speciality retailer Brookstone Holdings announced last week - a move that will also see Osim's massage products sprouting in the more than 300 US stores Brookstone has set up in 40 years.

Indeed, it was this opportunity for the two companies to bring their global ambitions to fruition that sealed the deal.

For Osim's founder and chief executive Ron Sim, who was already a Brookstone admirer 12 years ago, this was a chance to jump start Osim's presence at the top end of the US market, estimated to number about 60 million people.

And for Brookstone's CEO Michael Anthony, it was the opportunity to bring his company to the fastest growth region in the world that won him over.

'Through this, we can create a bigger, better thing in a faster and much smarter way,' Mr Anthony said yesterday at the press conference to introduce Brookstone to the local press.

He let on that, as with any change, his staff were initially 'nervous and apprehensive' about the takeover but 'the fact this is a Singapore-based company gives a little bit more comfort . . . it's a growing opportunity, not a cutting opportunity or an expense-saving opportunity'.

Late last Friday, Osim said it would lead a consortium, including a unit of Singapore's investment company Temasek Holdings, to take over all of Brookstone.

If the deal is completed in July or August as planned, Osim said it will equity account 55 per cent of Brookstone's results in Q3 2005.

Mr Anthony yesterday pointed out that despite the different cultures, the two companies share professional values like an emphasis on the quality of their products and people - something which will be the cornerstone of future growth. He dismissed concerns that Brookstone's lifestyle gadget stores might not take off in Asia, already home to a plethora of shops selling quirky gifts.

Where similar concepts have failed, he said Brookstone banks on a proven multi-channel distribution model, where physical stores, catalogue distribution and the Internet form the three-prong method to reach its customers.

In FY2004, Brookstone earned a record net profit of US$21.4 million, and it chalked up more than US$45 million worth of Internet sales.

Already, some analysts have estimated that the Brookstone acquisition could add as much as 9-15 per cent to Osim's bottom line.

But Mr Sim yesterday also addressed concerns of a possible stretch in Osim's management resources with his company taking over two companies - Global Active and Brookstone - in quick succession.

He stressed that the present management of Global Active and Brookstone, headed respectively by Cynthia Poa and Mr Anthony, will continue to helm the ship with Osim having a say in the companies' business strategy.

He explained his key strategy to target consumers with high-end products was because 'that's the way people aspire'.

'It's all about creating the desire, and if you are able to create this desire, from the brand's positioning, you basically create the demand,' he said.

No doubt, he is positive the boys will be happy with the new lifestyle gadget stores coming their way.

'For ladies, you can spend hours in a shoe shop, but for guys at the moment, there is nothing comparable in Asia. Now, at least there is something they can look forward to,' Mr Sim said.

Certainly, Mr Sim has much to look forward to as he embarks on Osim's new phase of growth.