P&G’S BEAUTY BRANDS – LATEST VICTIMS OF BRAND CONSOLIDATION PROGRAM?
A recent report from Forbes claims that a number of hair care brands under the Procter & Gamble label could be possible victims for the brand's Brand Consolidation Program. Forbes speculates that with this consolidation program, P&G is continuing its detachment from the beauty segment, which includes skin care, makeup, hair care and fragrances. In addition, P&G is also allegedly divesting brands such as Wella, although they noted that news has not officially been verified by P&G, even as rumours started t circulate since November.
Not only is Wella rumoured to be involved in P&G's Brand Consolidation Program, but also Clairol salon hair care products. Forbes noted that in 2014, P&G's Beauty Division accounted for a quarter of the company's total revenue amounting to $80B. In addition, the report also said that P&G's revenues have been declining in the last three years and in a faster rate in 2013 and 2014. In Forbes' estimates, P&G's market share in the global hair care market has fallen from a peak of 28% in 2011, and 22% in 2014.
Forbes surmised that P&G's lower numbers compared to competitors such as L'Oreal and Estee Lauder makes the beauty business unsustainable in the long term for P&G. In addition, Forbes also said that factors that have led to the supposed divestment are P&G's underperforming Beauty division businesses. Moreover, the report is also speculating that analysts have long considered P&G's beauty business as “ripe for downsizing”, and the company is “not likely to hesitate” selling multi-million brands such as Wella, giving rise to further persistent rumours.