Unilever reportedly revisiting plans to sell Elida Beauty amid industry challenges
15 Dec 2023 --- Unilever could be trying to offload yet another group of non-core beauty and personal care brands as it tries to bring its focus back to higher-growth initiatives.
Reuters reports the FMCG giant is in “advanced talks” with private equity firm Yellow Wood partners to sell Elida Beauty. That division includes ubiquitous brands such as Ponds, Q-Tips, St. Ives and Zwitsal in Europe.
Personal Care Insights reached out to both companies for comment.
Elida Beauty makeover
For years, Unilever has tried to create a scenario that would make the sale of Elida Beauty attractive for a potential buyer and Unilever’s bottom line.
The UK-based company reportedly struggled with that process in 2021, as companies allegedly engaged in picking and choosing select brands instead of making an offer for the entire division.
That same year, Unilever seemed to abandon its plan to sell Elida and instead, work on making the division an autonomous unit by “refounding” iconic brands for the many.
Unilever is selling Elida Beauty which includes brands such as St. Ives.Streamlining personal care
The company restructured its business model in 2022, creating five business groups with Elida Beauty under Personal Care.
It also sold long-standing American hair care brand Suave to Yellow Wood — the same company reportedly trying to purchase Elida Beauty.
Unilever axed 50,000 SKUs that year as it worked to streamline its personal care division, delisting some 60 local brands.
It seems investment banks Morgan Stanley and Evercore are now involved in helping Unilever finally find success in offloading Elida Beauty.
Unilever’s challenges
Market watchers are keen to see how much a potential buyer would pay for the entire division of Elida Beauty, but Wall Street analysts suggest it won’t top US$1 billion.
The consumer goods industry has struggled in recent years, with soaring costs related to shipping and the ingredients used to make the many products under its vast umbrella of offerings.
Hein Schumacher came on board last July to replace Alan Jope, who retires at the end of the year. Schumacher said he would be “very focused on working with the Unilever team to deliver a step-up in business performance.”
After its third-quarter earnings were met with a lukewarm response from analysts, Schumacher promised to focus on 30 of Unilever’s strongest brands, which account for 70% of company sales.
Stakeholders are keen to find out whether Unilever’s streamlining efforts, especially under Schumacher, will boost profits and its share value.
Meanwhile, Unilever is facing a “greenwashing” investigation in the UK and regulators turn up the heat on unsubstantiated “green” claims.
By Anita Sharma
