P&G’S BEAUTY BRANDS – LATEST VIC­TIMS OF BRAND CON­SOL­I­DA­TION PRO­GRAM?

h4ufme (Singapore) - - Clips -

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.

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