13 October 2000

Britain's largest ITV company, Granada Media, has joined forces with Boots, one of the nation’s largest retail chains. Together they plan a jointly owned e-commerce and interactive TV business, centred around health and beauty.

The controlling stake (60%) in the new company will be held by Boots, the remainder by Granada. Planned investment in year one is thought to be in the region of £18 million, with Boots contributing £10.8m and Granada £7.2m.

A Boots executive hailed the deal as a "primary initiative in consumer e-commerce". The retailer will merge its existing online transactional activities ( into the joint venture.

Crowed Granada chief executive Steve Morrison: "If we can tie up sport, health and education, I think we've got the most important things covered. This gives citizens their own personal health service," he added. "We will be doing some of the job the National Health Service does more expensively."

In the realm of sport, Granada already has commercial relationships with Liverpool and Arsenal football clubs.

Boots believes that the deal could represent some 2% of its UK sales within a few years. In the year to March, these totalled £5.2billion.

Analysts see the venture as another conduit through which Boots can drive sales growth, countering the potential threat from Wal-Mart and other discounters to its cosy margins. Opined one analyst: "It is a good idea, but hard to get excited about."

News source: Financial Times