Sales: $5.2 billion for household and personal care products. Corporate sales: $5.6 billion.
Key Personnel: Suk Yong Cha, vice chairman, chief executive officer and president; Sung Huh, vice president and chief financial officer.
Major Products: Cosmetics—The History of Whoo, O Hui, SU:M37, Belif, Davi, Frostine, Kachet, Beyond, Dermalift, ChungYoonJin, Tuneage, Isa Knox, Sooryehan, Lacvert, Cathycat Vonin, Carezone, The Saga of Xiu, TheFaceShop, VDL, VOV, Philosophy, Avon Japan; Hair Care—Elastine, Reen, Organist, Silk Therapy; Oral Care—Perioe, Bamboo Salt; Skin Care—OntheBody; Aromatics—Happybreeze, Partel, Healing&Nature; Laundry—Saffron, Hanip, Tech, Super Ti; Cleaning—Homestar, Insect Zero, Safe, Jayeonpong, PongPong.
New Products: New Avon (acquisition).
Comments: LG H&H has increased sales every quarter for more than 13 years; now it hopes to grow faster via its acquisition of New Avon. In April, the company entered into a definitive agreement with an affiliate of Cerberus Capital Management, L.P. and Avon Products, Inc. to acquire New Avon, LLC (Avon North America) for $125 million in cash.
LG H&H will acquire the entirety of Cerberus’ majority interest and Avon Worldwide’s minority interest in Avon North America. The addition of Avon’s iconic brand, award-winning products, dedicated employee base and network of 250,000 sales representatives throughout North America will support LG H&H’s international growth plans, the company said in a statement.
Under LG H&H’s ownership, Avon North America will continue its strategy of product innovation, while strengthening its position as the leading social selling beauty company in the region. Avon North America is expected to benefit from LG H&H’s R&D capabilities in cosmetics, personal care, fragrance, packaging and design, according to company executives.
“We recognize Avon North America’s strong brand, leading market position in the region and talented employees and Representatives. Avon North America’s innovative social selling model builds deep connections with customers and we are excited to leverage this as we continue to expand. We look forward to building on Avon North America’s success to drive customer engagement and long-term growth in this market,” said Suk Cha, CEO of LG Household & Health Care.
“LG H&H respects and admires our strong community of representatives, and supports our mission to empower women through economic opportunity,” said Laurie Ann Goldman, CEO of Avon North America. “We are thrilled to welcome our new partner, who shares our commitment to innovation, and our clear focus on putting customers first. We have appreciated our partnership with Cerberus over the last three years and their support as we strengthened the company and reset our path toward long-term success.”
The transaction is expected to close on September 30, 2019 and is subject to certain customary closing conditions, including regulatory approvals in the US.
The acquisition comes at a time when LG’s model is working at home and abroad. Sales rose 10% last year thanks to gains within the luxury cosmetics business.
For Q1, 2019, the company reported sales rose 13% to a record. Demand for premium-priced cosmetics led beauty sales higher, and sales of detergents and home care products increased too.