LG Household & Health to acquire Avon Japan for ¥10.5bn

The company’s Japanese affiliate Ginza Stefany will buy 100% of Avon Japan

Avon Japan is to join LG Household & Health Care’s portfolio as the company readies for a complete takeover.

LG’s Japanese affiliate Ginza Stefany has entered into an agreement to acquire 100% of the beauty company for ¥10.5bn, the equivalent of US$96m.

Avon Japan will join LG’s growing portfolio of beauty brands, which also includes belif, The Face Shop, O Hui, Dermalift and Philosophy.

Active in the region for more than 50 years, Avon’s Japan sales totalled $230m in 2017, according to Euromonitor International.

Sachi Kimura, Analyst at Euromonitor, said: “Korean Cosmetics in Japan had not shown significant growth in Japan given the popularity and availability of products sold by local Japanese manufacturers.

“However, Korean expansion is gradually starting to show momentum with brands such as Amorepacific’s skin care brand Innisfree entering the Japan market and launching their first store in early 2018.

“Avon Products is highly recognised in Japan and has been in the Japanese beauty market for 50 years.

“Furthermore, while the current Avon Products sales channel mainly consists of direct selling and the internet, the company has expanded its sales channel to growing channels such as drugstores in 2017.

“The cosmetic market in Japan is expected to show positive growth supported by the increasing number of inbound tourists and the stable domestic demand.

“Although it may be challenging to enter a market where local brands are favoured, LG Household & Health Care is looking to expand its presence in the growing market utilising a well-established Japanese brand.”

The Japanese beauty and personal care market was worth $36.1bn in 2017, and is forecast to reach $38.5bn in 2022.

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