Procter&Gamble wants to lose weight again? Recently, media reports reported that Procter&Gamble is considering selling Sassoon China business at a valuation of $1 billion and has begun evaluating investors' initial interest in the business. The options under consideration include selling all or part of Sassoon China business equity.
On October 23rd, the relevant person in charge of Procter&Gamble responded to a reporter from Nandu Bay Finance News that they would not respond to such speculative information. On the same day, a reporter from Nandu Bay Finance Society called the Sha Xuan brand, and the other party responded that they had not heard of this matter.
Sha Xuan's China business sold for $1 billion?
Procter&Gamble responded that it was speculative information
Bloomberg reported that P&G's Chief Financial Officer, Andre Schulten, stated in an interview that P&G is constantly reviewing its investment portfolio, including acquisitions and potential options, but he refuses to respond to the aforementioned transaction.
Recently, Procter&Gamble announced its first quarter results for the 2024 fiscal year. Procter&Gamble stated that its global shipment volume in the first quarter was dragged down by the weakness and volatility of the Chinese market. Schulten said on the financial report conference call that after the COVID-19 epidemic, the market is still shrinking. "We do not expect China's (economic) recovery will be fast."
On October 23rd, the relevant person in charge of Procter&Gamble responded to a reporter from Nandu Bay Finance News that they would not respond to such speculative information.
The proportion of Sassoon is lower than that of sisters brands
Procter&Gamble sold 43 brands including Sassoon for $12.5 billion
According to the official WeChat content and public information of Sassoon, in 1954, the founder of the Sassoon brand, Vida Sassoon, established the first salon in London, marking the beginning of Sassoon's brand journey. In 1985, Procter&Gamble acquired Sassoon, and in 1997, the Sassoon brand officially entered China, providing high-quality products for washing, care, and shaping. Yiyang Qianxi, Xiao Zhan, Luo Yunxi and others are the spokesmen of Sassoon.
The official flagship store of Sassoon on Tmall platform shows that Sassoon sells different kinds of products, including styling spray, shampoo, hair mud, hair care cream, gel cream, etc. Among them, providing shampoo for people with different hair colors is one of the characteristics of Sassoon.
Screenshot of Sha Xuan's official flagship store
The strategy implemented by Procter&Gamble is a multi brand strategy, and its hair care segment includes brands such as Aosi, Haizhi Recipe, Haifei Si, Herbal Essentials Plant Sense Philosophy, Pantene, Piaorou, and Sassoon.
According to the statistics of the Prospective Industry Research Institute, high-end brands such as Procter&Gamble, Unilever, and Schwarzenegger currently occupy the first tier of the Chinese market. The Chinese shampoo and hair care market is still dominated by foreign investment, with Procter&Gamble occupying the main market share of 34.2%; Next are Unilever and Guangzhou Adolf, with 11.4% and 9.1% respectively.
Compared with Head&Shoulders, Pantene and other sisters brands, Sassoon's market share is significantly lower. According to data from Oteo, in the first half of 2023, Sassoon's online market share was 2.2%. Although sales increased by 5.28% year-on-year, sales decreased by 8.7% year-on-year. Pantene and Haifei Si both had higher market shares than Sassoon, with 4.83% and 4.45% respectively. The sales volume and sales of these two brands increased year-on-year.
However, as early as 2015, P&G sold 43 brands including Sassoon, Weina, Mise Buddha and perfume in packages at a price of $12.5 billion, in order to simplify the portfolio and focus on faster growing product lines. Procter&Gamble believes that divesting these 43 brands is beneficial for the company to focus on its rapidly growing core brands. In 2017, Procter&Gamble announced another reduction in the number of brands, from over 200 at the time to 65.
The slowest growth rate in the beauty industry in Q1 2024, with a year-on-year decrease in net income
The only sector where P&G experienced a year-on-year decline in performance
It is worth noting that the beauty sector where hair care products such as Sha Xuan are located is one of P&G's five major businesses.
Nandu previously reported that on October 19, Eastern Time, Procter&Gamble announced its results for the first quarter of the 2024 fiscal year (July September 2023). During the reporting period, Procter&Gamble had a net sales revenue of $21.9 billion, a year-on-year increase of 6%, and a net profit of $4.556 billion, a year-on-year increase of 15%.
During the reporting period, the net sales of the beauty sector reached 4.097 billion US dollars, a year-on-year increase of 3%. Although the net sales of the beauty sector increased year-on-year, its pre tax profit and net income both decreased by 2% to 4% year-on-year. This sector is also the only one among Procter&Gamble's five major business sectors that experienced a year-on-year decline, and its net sales growth rate is the slowest.
Procter&Gamble stated that the organic sales of hair care products showed a high single digit growth, mainly due to the increase in pricing; The organic sales growth of skin and personal care products was relatively low in single digits, as higher pricing and innovation based sales growth were partially offset by the unfavorable combination of SK-II sales decline.
Previously, Sha Xuan brand PR stated in an interview that Sha Xuan is an important cornerstone of the company's hair care category. Under Procter&Gamble, the Sassoon brand has a unique positioning. It offers professional solutions for young consumers who pursue fashion and self-improvement. In addition to professional washing and care lines, it has also launched a series of styling, color protection and fixation, etc. to help consumers create super cool styling. This must be very unique in Procter&Gamble and has effectively complemented other shampoo and hair care brands.