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Kline analyses opportunities of P&G’s beauty divestitures for potential buyers

Prospective acquirers are now diving into the details on the soon-to-be former brands of Procter & Gamble’s struggling beauty business. The assets reportedly include small yet prestigious fragrance brands, such as Gucci and Hugo Boss, the substantial professional and retail hair care businesses of Wella and Clairol, and the legendary Max Factor and Cover Girl colour cosmetic brands. While this partial dismantling of P&G’s beauty empire ends an era of the U.S. company’s impressive growth trajectory in personal care, it sets the stage for exciting growth opportunities for strategic and financial buyers, according to global market research and management consulting firm Kline & Company.

In a recent opinion piece, the beauty research and consulting team at Kline has evaluated the beauty brands included in P&G’s assets for sale and the potential they offer to possible acquirers.

Kline shares its perspective on three categories included in P&G’s divestitures, starting with hair care brands, such as Clairol, a distant number two to L’Oréal in retail hair colorants, but “benefiting from strong consumer awareness and heritage in the category,” according to Carrie Mellage, head of Kline’s Market Research & Reports practice in Beauty. Susan Babinsky, head of Kline’s Management Consulting practice in consumer products, also noted that “by focusing efforts on the space that Clairol does indeed own, the brand has the opportunity to revitalize growth.Kline experts also discuss Wella, a leading player in professional hair care with a strong position in hair colorants. According to Kline’s experts, “Wella has growth potential in professional hair care, particularly in developing country markets.” Regarding Nioxin, a leading range of products for thinning hair, it is one of the treasures in this offering, according to Susan Babinsky.

Furthermore, this brief analysis covers other important brand assets including the two popular colour cosmetic brands, Cover Girl and Max Factor and its portfolio of prestige fragrance brands, most of which are licensed offerings of high-end fashion brands, such as Dolce & Gabbana, Gucci, Hugo Boss, and others.

While Cover Girl continues today as a highly successful brand with a share of about 20% of the US $6 billion U.S. mass market, it has lost ground in particular to L’Oréal, and its L’Oréal Paris Maybelline brands, according to Kline’s annual industry report Cosmetics & Toiletries USA. “The opportunity is to build this brand franchise globally,” remarked Babinsky. “P&G was unable to accomplish that,” she concluded.

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