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- Entered into an agreement to acquire 100% of Avon Japan at 10.5bn yen
- To strengthen Japan business through synergy
April 24, 2018 – LG Household & Health Care, Ltd. (CEO: Suk Cha) announced that its 100% Japan affiliate, Ginza Stefany, has entered into an agreement to acquire 100% of Avon Japan at 10.5bn yen (approx. 105bn won).
Avon Japan started business in Tokyo, Japan in 1968, and has 50 years of experiences in cosmetics business. In FY2017, it recorded sales of approx. 100bn won. In Japan market, where Japanese national brands have strength over foreign brands, Avon is ranked #21 (by retail sales amount), which is higher than Lancôme (#27), and Estee Lauder (#41) (Euromonitor 2016).
LG H&H has been building its business platform in Japan through acquisition of Ginza Stefany in 2012 and Everlife in 2013. Entry into Japan market by foreign companies is difficult as (1) consumers have high preference for Japanese brands, and (2) channels and OEM/ODM companies place importance on existing relationships. Considering such market dynamics, LG H&H first entered Japan market via the telemarketing channel, which allows direct communication with consumers. Recently, launch of cushion foundation allowed further channel expansion as the product was successfully launched into homeshopping, and became #1 in QVC, Japan’s one of the two major homeshopping channel.
From Avon brands’ credibility in Japan market, and 50 years of relationships with local companies, LG H&H would like to remove Japan business constraints and strengthen synergy of current business expansion. Also, Japan business would be enhanced through LG H&H’s R&D capability and diversified product portfolio.