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LG Household to buy Japanese cosmetics firm for 10.5 bln yen

2018/04/24 14:44

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SEOUL, April 24 (Yonhap) -- LG Household & Healthcare Ltd., a major South Korea cosmetics and household goods maker, said Tuesday its Japanese affiliate will purchase a Japanese cosmetics firm for 10.5 billion yen (US$97.6 million) to expand its overseas business amid record-high earnings.

Ginza Stefany Inc., based in Japan and wholly owned by LG Household & Healthcare, has decided to buy a 100 percent stake of Avon Products Co., according to the Korean firm.

Founded in 1968, Avon Products has 50 years of experience in the cosmetics market in Japan, with sales reaching 100 billion won ($93 million) for the fiscal year 2017, according to LG Household & Healthcare. Avon Products ranked 21st in terms of sales in the Japanese cosmetics market, beating Lancome at 27th and Estee Lauder at 41st, LG Household & Healthcare said, citing a 2016 report from market researcher Euromonitor.

The acquisition is the Korean cosmetics giant's latest move to strengthen its foothold in Japan after buying local firms Ginza Stefany in 2012 and Everlife Co. in the following year.

"Based on Avon brands' credibility in Japan and its five decades of relationships with local companies, LG Household & Healthcare would like to overcome possible obstacles in expanding business in the country," the company said in a statement.

Also Tuesday, the Korean cosmetics giant released record-high earnings for the first three months of this year.

LG Household & Healthcare reported 196.4 billion won of net profit in the first quarter, up 8.8 percent from a year earlier. Sales rose 6.5 percent on-year to reach 1.7 trillion won, and operating profit was up 9.2 percent to 284 billion won during the cited period, according to its regulatory filing.

Despite slow recovery in the number of inbound tourists and continued sluggish domestic demand, luxury cosmetics posted strong growth both in the domestic and overseas markets, and led the firm's overall sales and operating growth, LG Household & Healthcare said.

scaaet@yna.co.kr

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