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LG Household & Health Care Divests Avon to Focus on Core North American Brands
Consumer Non-Durables · Household/Personal Care · yonhap_finance · 2026-08-24
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LG Household & Health Care is selling its US subsidiary Avon to streamline operations and pivot resources toward its high-growth proprietary K-beauty brands.
What Happened
Divestiture of Avon: LG Household & Health Care has announced the sale of its 100% stake in The Avon Company to Stratford Worldwide for approximately 8.4 billion KRW. This move marks a strategic shift away from low-margin legacy assets to focus on core business operations.
Financial Implications: While the sale price is significantly lower than the original acquisition cost, analysts view the exit as a positive step for profitability. By shedding a loss-making business, the company aims to improve its overall financial health and operational efficiency in the North American market.
Strategic Pivot: The company is transitioning its North American strategy from relying on Avon's distribution network to prioritizing its own brands such as Dr. Groot, Belif, and CNP. Recent data shows that proprietary brands now account for 50% of North American sales, contributing to a successful turnaround in the region.
Analyst Outlook: Financial analysts maintain a 'Buy' rating on the stock, interpreting the divestment as a sign of business maturity. They believe that reallocating capital toward high-growth, high-margin internal brands will drive long-term value and improve the quality of the company's North American portfolio.