LG Household & Health Care has agreed to sell The Avon Company, a U.S. subsidiary it acquired seven years ago, for 8.3 billion won ($6 million). The company plans to divest the loss-making Avon and refocus its North American operations on "retail- and digital-based K-beauty and wellness brands."
LG H&H's North American arm, LG H&H USA, Inc., signed a share purchase agreement to sell its entire 100% stake in Avon to Stratford Worldwide, the company said on the 24th. Stratford Worldwide is an affiliate of Regent, a global investment firm that runs Avon International, Avon's global business.
LG H&H acquired Avon for 145 billion won in April 2019 to expand its North American business, but Avon's door-to-door sales strategy failed to keep pace with recent trends, leaving it in the red every year since 2021. As Avon's finances deteriorated, LG H&H had lent it $205.5 million, and after failing to recover the loan, decided to convert the entire amount into equity.
Using the Avon sale as a turning point, LG H&H plans to realign its business portfolio priorities to match rapidly changing consumer purchasing patterns and the retail environment. It will also concentrate its resources and capabilities on brands and channels with high growth potential.
Going forward, LG H&H plans to expand consumer touchpoints across retail and digital channels, centered on brands growing quickly in global markets such as Dr.Groot, Belif and CNP, and to build out its K-beauty and wellness brand portfolio. Under its vision as a "Science-driven Beauty & Wellness Company," LG H&H is reorganizing its business portfolio with top priority on strengthening the competitiveness of its existing flagship brands.
