South Korea’s LG H&H is selling the Avon business in the United States and Canada that it acquired in 2019. The move represents a portfolio restructuring aimed at exiting Avon’s direct-selling and social-selling model to concentrate capabilities on K-beauty and wellness brands such as Dr.Groot, Belif, and CNP, as well as retail and digital channels.

LG H&H announced on the 24th that its North American subsidiary LG H&H USA has signed a stock purchase agreement (SPA) to sell 100% of its stake in The Avon Company to Stratford Worldwide. The sale price will be finalized at the time of transaction closing.

Stratford Worldwide is an affiliate of global investment firm Regent. Regent acquired Avon International in January and currently operates the Avon business in regions outside North America, including Europe, Asia, and Africa. Once this transaction is completed, the North American operations will also fall under the same leadership as Avon International.

The ‘sore thumb’ of North American operations

Despite substantial capital injections from LG H&H, Avon has continued to expose structural limitations. After posting revenue of 251.8 billion won (approximately $182.0 million) and a net loss of 28 billion won (approximately $20.2 million) in 2024, the company recorded revenue of 32.8 billion won (approximately $23.7 million) and a net loss of 5.6 billion won (approximately $4.0 million) last year, showing a sharp revenue decline. Total equity also fell to negative 44.7 billion won (approximately $32.3 million) at the end of last year, leaving the company in a state of complete capital impairment.

Ahead of this transaction, LG H&H’s North American subsidiary decided to convert the entire 286.3 billion won (approximately $206.9 million) in loans extended to Avon into equity, clearing the internal debt relationship. No separate cash injection is involved, and there is no change in the ownership stake. Adding the 147.7 billion won ($125 million) invested at the time of the 2019 acquisition, total capital deployed amounts to 443 billion won (approximately $320.1 million).

Selective focus on K-beauty brands

The divestiture signals a shift in how LG H&H approaches business expansion in the North American market. As consumer purchasing patterns rapidly shift toward online and specialty retail channels, the company has pivoted toward concentrating investment in high-growth proprietary brands.

In particular, LG H&H plans to put Dr.Groot, Belif, and CNP—brands showing growth momentum in the North American market—at the forefront. The company will expand consumer touchpoints through retail and digital channels while broadening its K-beauty and wellness brand portfolio.

LG H&H has set a mid- to long-term vision as a “Science-driven Beauty & Wellness Company” and is reorganizing its business portfolio to strengthen the competitiveness of its core brands. The Avon divestiture is an extension of efforts to streamline non-core businesses and concentrate resources on growth brands.

A fresh start for Avon

Under Regent, Avon will pursue integration benefits between its North American and global operations. Following the transaction closing, the company plans to expand collaboration between Avon’s North American and international businesses in product development, marketing, and social selling.

Michael Reinstein, Chairman of Regent, said, “LG H&H has demonstrated success in modernizing the business while preserving Avon’s heritage,” adding, “Going forward, the North American and international businesses will create new growth opportunities through shared strategy and product synergies.”

An LG H&H representative stated, “This decision allows Avon to pursue new growth opportunities based on its social-selling business model, while LG H&H focuses more intensively on a brand-driven growth strategy in North America. We will concentrate resources and capabilities on competitive beauty and wellness brands centered on retail and digital channels.”