Dr.Groot, Belif and CNP to lead brand-focused growth as LG H&H reshapes global portfolio
LG Household & Health Care is selling its Avon business in the United States and Canada as the South Korean consumer goods company shifts its North American strategy toward K-beauty and wellness brands distributed through retail and digital channels.
LG H&H USA, the company's North American subsidiary, signed an agreement on Aug. 24 to sell a 100% stake in The Avon Company to Stratford Worldwide, an affiliate of global investment firm Regent.
The final transaction value will be determined when the deal closes.
The divestment comes about seven years after LG Household & Health Care acquired Avon's North American business in April 2019 as part of an effort to expand its presence in the region.
The company said the latest decision reflects changes in consumer purchasing behavior and distribution channels and is part of a broader effort to reshape its global business portfolio.
Rather than withdrawing from North America, LG Household & Health Care plans to concentrate resources on its own beauty and wellness brands with stronger growth potential.
Dr.Groot, Belif and CNP Move to Center of North America Strategy
Following the Avon sale, LG Household & Health Care plans to expand consumer touchpoints for Dr.Groot, Belif and CNP through retail and digital channels in North America.
The shift represents a change in how the company intends to pursue growth in the region.
Avon has traditionally relied heavily on social selling, while LG Household & Health Care is increasingly seeking to build direct consumer recognition for its own brands through mainstream retail and online platforms.
The company plans to allocate more resources and capabilities to competitive beauty and wellness brands as part of its vision to become a “Science-driven Beauty & Wellness Company.”
The strategy places greater emphasis on strengthening established brands while expanding a portfolio of products that can compete in international markets.
North American Avon Business to Rejoin Global Operations
Stratford Worldwide is affiliated with Regent, which acquired Avon International in January.
Avon International operates the brand across major markets in Europe, Asia and Africa, excluding North America.
Once the latest transaction is completed, The Avon Company in North America and Avon International will operate under the same leadership.
The businesses are expected to pursue greater cooperation in areas including product development, marketing and social selling, effectively bringing Avon's North American and international operations back under a common strategic framework.
Michael A. Reinstein, chairman of Regent, said Avon has represented “opportunity, independence and human connection” throughout its 140-year history.
He also credited LG Household & Health Care with preserving Avon's heritage while modernizing the business and said closer alignment between the North American and international operations would create new opportunities through shared strategy and product synergies.
LG H&H Reallocates Resources Toward Brand-Led Growth
As part of the transaction, LG H&H USA will convert loans extended to The Avon Company into equity to settle outstanding intercompany financial arrangements.
The conversion will not require an additional cash payment and will not change the ownership ratio before the sale.
For LG Household & Health Care, however, the more significant change is strategic.
The company is moving away from operating Avon as a separate North American sales platform and directing more attention toward building brands it owns and can develop globally.
“Avon will pursue new growth opportunities based on its social-selling business model, while LG Household & Health Care will focus more intensively on a brand-led growth strategy in North America,” an LG Household & Health Care official said.
The company added that it plans to accelerate growth by concentrating resources and capabilities on competitive beauty and wellness brands, particularly through retail and digital channels.
The divestment therefore marks a new phase in LG Household & Health Care's North American strategy. Seven years after acquiring Avon to strengthen its local business platform, the company is now betting more directly on the global growth potential of its own K-beauty and wellness brands.
