This Is Guernsey

By Tom Edwards

Healthspan founder and chief executive Derek Coates, left, and Healthy Direct managing director Graham Winn. (Picture by Peter Frankland, 0567907)

THE acquisition of Healthy Direct by Healthspan has been declared a ‘marriage of abilities’ by the managing director of each firm.

The latter bought out its Guernsey rival this week in an eight-figure deal. The combined company will now have a 60% market share of all direct sales of nutrition supplements in the UK.

Healthspan founder Derek Coates said the amalgamation would create a force to be reckoned with. ‘We are moving outsourced services, such as warehousing, IT and call centres to Guernsey in order to make savings. When you have two businesses that are similar, which is the case here, the cost-cutting potential is remarkable. By combining our marketing skills and budgets, we can also explore foreign markets more cheaply and efficiently.’

The combined sales of Healthspan and Healthy Direct nutrition supplements laid end to end would stretch 75,000 miles.

While the two brands will remain distinct from one another, behind the scenes the firms will work to maximise business flows.

Managing director Graham Winn, who joins the Healthspan board but remains in his current role, said the acquisition would instigate product diversification.

‘We are probably the e-commerce and lifestyle experts, while Healthspan’s strengths are nutrition and branding, so there will be a shift in product ranges.

‘Around 30 to 40 per cent of our products are different, but the brands will move further away from each other in order to avoid sending mixed messages to consumers.

‘It’s still early days, but hopefully we can learn from each other and make the combined business very successful.’

There will be no Guernsey job losses resulting from the move and 21 staff will join their new colleagues at the Healthspan offices in the Grange next month.

Mr Coates said the firms’ monthly magazines would have a readership larger than that of The Times, Telegraph, Express, Observer and Independent combined.

‘Together our publications will reach an audience of nearly four million people and we can talk about any aspect of health that we like.

‘We could even talk about politics and side with a political party if we wanted to, but we wouldn’t do that.

‘It also means that more people than ever before will know about our hotels and airline as well.’

The two firms have put their differences aside after Healthspan attempted to sue Healthy Direct for £17.5m. in 2004 for allegedly copying its advertising.

Healthspan had accused its rival of deliberately misleading customers, but the case was settled amicably out of court.

Mr Coates said that a relationship had developed while both companies were consulted by the States on the VAT loophole.

‘It was two years ago when we first had discussions about the benefits of unity.

‘During that time we were healthy commercial competitors and had been involved with discussions about UK legislation.

‘Graham and I got to know each other and went out for the odd beer.

‘It’s a difficult world out there and we had a mutual respect for each other’s achievements.

‘I made the offer in January, but it’s a private deal and I’m not saying how much for.’