Procter and Gamble on the brink of selling Wella?
Hair and beauty is big business. The quarter of a million hair professionals in the UK who work in our industry help to contribute around £5 billion to the economy. And there are many other big numbers when we look internationally, especially among the big product manufacturers. Recently, significant industry news included P&G selling Wella. This is a notable development for businesses like L’Oréal, Henkel and Kao. Each of these companies sells billions of pounds of hair and beauty products every year.
Right now it’s the numbers in American giant Procter & Gamble’s Wella business that are being closely watched. For the last six months there have been lots of stories about P&G wanting to sell all or part of Wella. It’s estimated that Wella is worth around £4 billion. So why would P&G want to sell it?
Because it’s not making as much money as they’d like, that’s the simple answer. Even though Wella sells products worth around £600 million a year, it’s not as profitable as other brands. P&G’s personal care business is struggling to keep up with other giants. These include L’Oréal and Estée Lauder. Hence P&G’s intent on the selling of Wella.
The history
Wella was founded way back in 1880 in Germany by the Ströher family. They began by making lace for wig making, and then moved into perming appliances and hair care products.
P&G bought Wella in 2003 to add to their worldwide range of beauty and grooming brands. But some observers say that Wella has never really fitted well into P&G. This is because it relies so heavily on a strong, direct relationship with salons. This contrasts with the P&G way of mass retail distribution.
Potential buyers for Wella include big, European manufacturers like Henkel and Unilever. Private equity companies might also be interested in purchasing this part of P&G. They might independently sell Wella.
UK salons who use Wella products should know very soon who has bought the business. Then they’ll need to wait to find out what it will mean for them. They’ll also want to know what will change under the new owners.
What do you think of Wella, and if you think Wella will do better with new owners? Let us know.
