Unilever Sells 13 Beauty Brands as It Prepares to Enter High-End Market

Unilever is in advanced negotiations with private equity firm Yellow Wood Partners to sell its Elida Beauty, which owns 13 beauty brands including Pond's. The deal is expected to be worth no more than $1 billion. As early as February this year, it had a willingness to sell, and the buyer was also Yellow Wood Partners.

13 brands sold for less than $1 billion.

Yellow Wood Partners has won the Elida Beauty auction and is currently negotiating the final stages of the deal, which is expected to be worth less than $1 billion. According to public information, in 2022, Elida Beauty’s cumulative sales was approximately US$760 million.

It is understood that the 13 beauty brands sold this time include Impulse, Caress, Ponds, Brut, Moussel, Alberto Balsam, Matey, Q-Tips, Tigi, Timotei, Monsavon, St.Ives, Zwitsal, which are affiliated to Elida Beauty business segment of Unilever.

However, sources also said that the above-mentioned transaction negotiations may still end in failure. Unilever did not respond to the incident, while Yellow Wood Partners declined to comment.

According to public information, Yellow Wood Partners is a company headquartered in Boston that focuses on investment in the consumer sector. The brands it invests in include tanning brands Isleof and Paradise and foot care brand Dr. Scholl's.

In fact, this is not the first time Unilever and Yellow Wood Partners have reached a deal. In February this year, Unilever sold the North American business of personal care brand Suave to Yellow Wood Partners. It is understood that Suave’s main products include hair care, skin care, skin cleansing and deodorant. It is worth mentioning that this transaction only covers the United States and Canada, outside the above two regions, Unilever will still retain all terms of Suave.

In addition, in October this year, Unilever also announced that it would sell men's care brand Dollar Shave Club to US private equity firm Nexus Capital Management LP, but Unilever will still retain a 35% stake in the brand, according to transaction practices , the deal will be completed this year.

According to Unilever's third quarter report, its third-quarter revenue fell 3.8% year-on-year to 15.2 billion euros; of which, the beauty and health segment's revenue fell 4.9% year-on-year in the third quarter to 3.1 billion euros; the personal care segment was 3.6 billion euros, a year-on-year decrease of 2.2%.

Looking at its overall performance in the first three quarters, it can be said to be relatively flat. Unilever's overall sales in the first three quarters only increased slightly by 0.4%, reaching 45.8 billion euros.

Cutting off the underperforming brand portfolio does not mean that Unilever wants to reduce the overall size of the cosmetics market. It is obvious that focusing on high-end products has become a strategic choice for Unilever. For example, Unilever has acquired a number of high-end brands in the past few years, such as Hourglass and Tatcha.

Not long ago, the venture capital arm of Unilever Group cooperated with investment company True Beauty Ventures and announced its investment in Canadian high-end perfume brand The 7Virtues. The specific investment amount was not disclosed. This shows that Unilever is actively exploring new market opportunities and hopes to further enhance market competitiveness by strengthening its high-end brand portfolio.