Steiner: Ocado acquisitions could pave way for move into new sectors

Steiner said Kindred Systems, the US-based robotics solutions company it acquired today for $262m (£203.7m), already works with fashion and general merchandise clients such as Gap and American Eagle. 

He said that Kindred Spirits would be working with the group’s engineers to help with “solving the grocery challenge” of automating picking and packing, he did not rule out the group branching out into categories like fashion and general merchandise in future. 

“As we’ve always said, grocery is the core market – it’s the hardest market and the biggest market and has been our core focus. We’ve never ruled out going into general merchandise,” said Steiner.  

“Obviously we’re inheriting some client relationships in [general merchandise], we’re not just going to let Kindred Systems carry on in that space, we’re going to help them to accelerate their business in that space. We might consider deploying our other solutions from the Ocado group in that space.” 

Steiner also said Kindred Systems currently only had clients in the US and Ocado would look to give it a more international reach in taking on new clients in these sectors.

“We and Kindred Systems are not just going to support existing customers but look to go after new clients they are already pursuing and expand them. We’re going to give them global reach whereas all of their clients are currently in the United States,” he added.

He also said the technology required to automate the picking and packing of groceries represented the more complicated challenge, as opposed to automating online general merchandise and fashion orders.

“We will now expand that customer base within the group and that does open our thinking and opportunities for us in terms of expanding our general sales reach for our Ocado Smart Platform-type products, which will need very little alteration to operate in the general merchandise market,” Steiner said.

Since the acquisition announcement this morning, Ocado’s share price has risen more than 6% since trading opened. 

Broker Peel Hunt said the new acquisitions had “enhanced [Ocado’s] robotic picking, aimed at saving costs at very attractive returns” and “the solutions fit seamlessly into its current footprint and will be fully integrated. There is still a lot more to come from this innovative disruptor.”

Ocado also acquired Haddington Dynamics for £25m (£19.4m). It is a Las Vegas-based research company that specialises in the manufacture of low-cost, lightweight, highly dexterous robotic arms.