Unilever is set to sell Q-Tips and a number of its other personal care and beauty brands.
The consumer packaged goods giant on Monday (Dec. 18) announced it had reached an agreement to sell its Elida Beauty unit to Yellow Wood Partners.
According to a company news release, Elida comprises more than 20 brands. In addition to Q-Tips, its lineup includes Caress, Timotei and Tigi. Unilever says this business generated turnover of roughly $873 million last year.
Terms of the deal were not disclosed.
“This marks another step towards the optimization of our personal care portfolio,” Fabian Garcia, president of Unilever Personal Care.
“Our priority is to step up the growth of our Power Brands by investing behind key strategic focus areas such as driving unmissable brand superiority and scaling multi-year innovations.”
The announcement follows reports from September that Unilever was working with Morgan Stanley and Evercore to sell a selection of its “non-core” beauty and personal care brands.
As noted here at the time, the move marks the resurrection of a strategy Unilever abandoned two years ago, and the first big project under new CEO Hein Schumacher, who is attempting to streamline the company’s business as it deals with inflation.
The sale comes as consumers continue to spend on beauty products, despite ongoing inflation.
“There is an economic theory that can be traced back to the Great Depression of the 1930s: the Lipstick Effect, which suggests that even in the toughest economic times, consumers will still spend money on small indulgences such as lipstick,” PYMNTS wrote last week.
“Today, after two years of persistent inflation, it seems that consumers are still proving that the theory could hold some weight in 2023 — at least, as far as retail subscriptions for beauty items are concerned.”
PYMNTS Intelligence and LendingClub market research has found that health and beauty and clothing are the retail categories consumers splurge on the most.
While splurging is often limited in tougher economic times, this isn’t the case for beauty products, a category where consumers living paycheck-to-paycheck and who have issues paying bills are more likely to spend the most.
The post Unilever Sells Q-Tips and Other Brands to Yellow Wood first appeared on PYMNTS.com.
