LG Household acquires US cosmetics brand for North American expansion Company is trying to diversify its business portfolio
Translated by Kim So-in 공개 2022-04-27 07:44:25
이 기사는 2022년 04월 27일 07:40 thebell 에 표출된 기사입니다.
South Korean beauty conglomerate LG Household & Health care is expanding its footprint in the North American market to reduce its reliance on the Chinese market.LG Household & Health care has recently signed an agreement to acquire a 65% stake in Los Angeles-based cosmetics brand The Crème Shop for $120 million (148.5 billion won). The Crème Shop, which is targeting young customers, has seen sales jump by 30% on average over the past three years.
LG Household has diversified its business portfolio through active mergers and acquisitions (M&A) deals. The company acquired U.S.-based The Avon Company, previously known as New Avon, in 2019 and purchased Physiogel’s business rights in Asia and North America in 2020. It also bought Boinca, an American hair care product manufacturer last year.
It is notable that LG Household was desperate to establish a springboard to enter the U.S. market considering The Avon, which LG Household acquired for 145 billion won, was in capital erosion in 2019. The American company’s total equity stood at negative 55.4 billion won.
Having operated its offline channel through its U.S subsidiary, LG Household & Health Care America, LG Household tried to boost its sales by targeting both online and offline distribution channels in the U.S. through the acquisition of The Avon.
The problem was that LG Household’s brand awareness was a lot weaker in the U.S. than in China, which accounts for more half of its flagship brand Whoo’s global sales.
The acquisition of The Crème Shop, following Physiogel and Boinca, comes as LG Household is trying to reduce its heavy reliance on China, after suffering from weak sales there.
The Crème Shop saw its sales and net profit increase by 61.5% and 76.8% year-over-year to 47 billion won and 11.9 billion won in 2021. LG Household aims to create synergies with existing brands like The Avon for further growth.
LG Household had three entities in the U.S., including LG Household & Health Care USA, The Avon and Boinca as of the end of last year. The Avon also has a Canadian entity. LG Household plans to expand its North American business through the entities. (Reporting by Seon-ho Kim)
< 저작권자 ⓒ 자본시장 미디어 'thebell', 무단 전재, 재배포 및 AI학습 이용 금지 >
관련기사
- LG Household & Health Care’s beverage business loses profitability
- Cosmax establishes research center jointly with Thai cosmetics firm
- JKL Partners to acquire cosmetics company Perenne Bell
- S Korean conglomerates seeking to expand cosmetics business
- Anchor Equity Partners invests in cosmetics companies
best clicks
최신뉴스 in 전체기사
-
- 인텔리안테크, 한화시스템과 군 평판안테나 개발 계약
- 뷰노, 대기자금 활용법 '국공채 펀드' 법차손 효과는 덤
- [루키 바이오텍 in market]제노스코, 본임상 없이도 '기평 만점' 고종성 효과, 수익기반
- [thebell note]판교 '바이오' 밸리의 재탄생
- 곽동신 부회장, 라인넥스트 투자로 '자금력 입증'
- [Red & Blue]'화장품 유통' 실리콘투, K뷰티 흥행 '고공행진'
- [그리드위즈 road to IPO]2대주주 올라선 SK가스, 7년 장기투자 행보 이어질까
- [Company Watch]'10%대 순이익률' 해성옵틱스, 역대급 실적 기대감
- '우시 빈자리' 노리는 에스티팜, 글로벌 눈높이 맞춘다
- [Company Watch]네오티스, 3개 분기만에 흑자 전환 "회복세 본격화"