LG Household & Health Care to sell Avon’s North American business

LG Household & Health Care will sell its subsidiary, The Avon Company, as it shifts its North American business toward retail- and digital-driven K-beauty and wellness brands.

LG H&H USA, Inc., LG Household & Health Care’s North American subsidiary, signed an agreement on the 24th (Korea time) to sell its entire 100% stake in The Avon Company (hereafter, Avon’s North American business) to Stratford Worldwide. The sale price will be finalized when the transaction closes.

Stratford Worldwide is an affiliate of Regent, the global investment firm that operates Avon International.

Since acquiring the rights to Avon’s North American business in April 2019, LG Household & Health Care has worked to expand its North American operations and improve its competitiveness. The transaction is part of a global portfolio realignment to reset business priorities in response to rapidly changing consumer buying patterns and retail environments, and to focus resources and capabilities on brands and channels with strong growth potential.

Going forward, LG Household & Health Care plans to expand consumer reach through retail and digital channels, with a focus on fast-growing global brands such as Dr.Groot, Belif and CNP, while growing its portfolio of K-beauty and wellness brands. Under its vision of becoming a “Science-driven Beauty & Wellness Company,” the company is reorganizing its portfolio, with strengthening its core brands as its top priority.

Regent acquired Avon International in January and operates Avon businesses in major markets outside North America, including Europe, Asia and Africa. Once the transaction closes, Avon’s North American business will operate under the same leadership as Avon International, with plans to expand collaboration and synergies in key areas such as product development, marketing and social selling.

“For 140 years, Avon has been an iconic brand that has stood for opportunity, independence and human connection,” said Michael A. Reinstein, Regent’s chairman. “LG Household & Health Care has done a good job of modernizing the business while preserving Avon’s legacy. Going forward, Avon’s North American business and international operations will create new growth opportunities through a shared strategy and product synergies.”

LG Household & Health Care said the decision will allow Avon to pursue new growth opportunities through its social-selling business model while enabling LG Household & Health Care to focus more closely on brand-led growth in North America. It added that it will accelerate growth by concentrating resources and capabilities on competitive beauty and wellness brands across retail and digital channels.

Separately, LG H&H USA will convert the loan it made to The Avon Company into equity. The move will settle intercompany receivables and payables; it will require no additional cash contribution and will not change the ownership stake.