LG H&H to sell Avon subsidiary to focus on proprietary brands

LG H&H has decided to sell its 100% stake in The Avon Company to Stratford Worldwide for approximately 8.4 billion won. This sale represents a significant reduction from the 145 billion won paid to acquire the American cosmetics subsidiary seven years ago.

The divestment follows a decline in Avon's performance, with annual revenue dropping from roughly 700 billion won in 2018 to 269.2 billion won last year, alongside a net loss of 30.1 billion won. Analysts suggest the move allows LG H&H to pivot away from low-profit businesses and concentrate resources on its high-growth proprietary brands, such as Dr. Groot, CNP, and Belif.

This strategic shift coincides with a broader trend in the South Korean cosmetics sector. LG H&H reported that its North American sales reached 205.8 billion won in the second quarter, surpassing its Chinese market revenue for the first time. Meanwhile, APR continues to lead the domestic cosmetics market by market capitalization, though established players like LG H&H and Amorepacific are seeing stock price recoveries driven by expanding footprints in North America and reduced reliance on the Chinese market.