Henkel: Vidal Sassoon acquisition from P&G to boost core hair business in China

06 Feb 2024 --- Henkel purchases Vidal Sassoon from Proctor and Gamble (P&G) to boost its presence in China. The German consumer goods company tells Personal Care Insights this latest acquisition will enhance its Consumer Brands business in a lucrative region.

“Vidal Sassoon is a well-known Salon-inspired brand with a strong presence in the Premium Consumer space. With this acquisition, Henkel will strengthen the core Consumer Brands Hair business in China and substantially increase its size. The acquisition also complements the local Consumer Brands brand architecture by addressing a white spot in the premium retail hair care segment.”

Boosting Asian expansion
Vidal Sassoon was created by the late British celebrity hairdresser famous for his Hollywood connection. P&G bought the brand in the 1980s, and last year, it reported more than €200 million sales in China.

Henkel says Vidal Sassoon acquisition will help “solidify” its position and scale up its hair business in China.The company already has a foothold in China with brands such as Schwarzkopf, Schwarzkopf Professional, and Shiseido Professional. Henkel says it is well-positioned for even further expansion thanks to the Vidal Sassoon acquisition, which Henkel believes will help “solidify” its position and scale up its hair business in China.

Merging consumer business
Henkel has been restructuring for the past two years, creating the Consumer Brands division to streamline its consumer portfolio and bring several brands, including Fa and Persil, as well as different categories under one umbrella:

“In the context of the merger of our consumer businesses, Laundry & Home Care and Beauty Care, we announced in 2022 to review up to €1 billion (US$1.07 billion) of sales. Until Q3/2023 around €600 million (US$640 million) were already successfully executed.”

Salon-style product trends
Lu Ann Williams, co-founder and global insights director of innovation at Innova Market Insights, recently told us to watch for hair care trends, including “more salon-style products in salon-style packaging for every consumer group – men, different ethnicities, mature consumers.” She said products are increasingly targeted at smaller groups of consumers, delivering the benefits consumers seek.

Last year, Yellow Wood Partners struck two deals with Unilever, first purchasing the long-standing American hair care brand Suave, which debuted in the 1930s as an alternative to salon-quality brands.

Later that year, the Boston-based private equity firm purchased the Elida Beauty division, which contains brands such as Pond’s Cream and Q-Tips. 

M&A activity
After the Elida Beauty purchase, Yellow Wood told us to expect even more acquisitions this year, with FMCG companies selling brands that may get less attention in a more extensive portfolio. Yellow Wood said it looks for those situations where it can take the brand and grow it through existing distribution channels.

Two weeks ago, Yellow Wood purchased Chapstick from Haleon, the latter company spinning off GSK and stating it was trying to remove “non-core” brands from its portfolio, similar to the moves of Unilever and P&G.

Henkel will release fourth-quarter earnings in March. Its last report from November last year showed that price increases and reduced costs helped the company post solid earnings, which the CEO said was proof that the new strategy was paying off, with performance in its Consumer Brands business surpassing expectations.

By Anita Sharma