LG Household & Healthcare (H&H) reported all-time highs for
annual sales at $2.4 billion (up 27.5%) and operating profit at $30
million (up 52.0%) in 2010. The company breaks its results into
three main sectors—Healthy, Beautiful and Refreshing—
representing household care, cosmetics, skin care and other HBA products in the first two, with beverages in the latter unit.
Within HAPPI’S scope, sales within the firm’s Healthy business unit rose 15.6% to nearly $950 millon—making LG the first
household business in Korea to exceed sales of one trillion won,
according to the company. Within this unit, the hair care category grew by more than 30% YOY, driven by a new brand called
I Hee Care for Style and ReEn, an oriental herbal concept brand.
Body care sales rose 20%, bolstered by LG’s eco line Beyond (up
40%) and Say brands. This category, which also includes diaper
and sanitary napkin businesses, saw its operating profit increase
more than 25%.
Sales within the Beautiful business unit jumped 52.4% to
more than $880 million, exceeding the 1 trillion hurdle for the
first time, and operating profit jumped 103.3%. The prestige
segment maintained rapid growth, according to LG, with Whoo,
SU:M and Belif (a new brand) faring well. Specifically, SU:M
posted 70% growth year-over-year as LG expanded its counters
from 22 to 40. Within masstige, Beaute de Beautiplex, billed as
upgraded version of Beautiplex, opened 117 stores. LG acquired
TheFaceShop in January 2010 and has upped the number of
TheFaceShop stores, adding 160 domestic doors and 54 overseas shops during the year, pushing total stores in operation at
the end of 2010 to 1,194.
In 2011, LG H&H’s overall strategic objectives are to continue to focus on a premiumization strategy to provide differentiated products with a unique value proposition, and
strengthen its product portfolio by extending value-oriented
product lines that maximize consumer value through minimizing unnecessary packaging and ingredients. On top of solid domestic business performance, LG said it will also expand its
presence in overseas markets, especially in China, by enhancing
product ranges and expanding channel coverage.
15. Amore Pacific
Sales: $1.7 billion
Kyung-Bae Suh, president and chief executive officer; Sang-Bae
Shim, executive director and executive VP, production and logis-
tics; Young-So Known, executive director and executive director,
sales and marketing; Dong-Hyun Bae, executive director and ex-
ecutive director, business; Chang-Soo Yang, director, marketing;
Hak-Hee Kang, director of R&D.
Cosmetics—Amorepacific, Hera, Sulwhasoo, Lirikos, Verite,
Laneige, Iope, Mamonde, TeenClear, Primera, InnisFree, Lolita
Lempicka, Odyssey, Etude, Espoir; Personal Care—Mise-en-Scene,
Ryoe, Happy Bath, Dantrol, Median, Songyeum; Health Care (
including tea, beauty foods/supplements and drugs).
Amore Pacific’s sales rose 16.4% in 2010 but operating profit fell
13.2% to about $296 million. Net profits rose 25.9% to $248 million. By channel, door-to-door sales represented 29.8% of total
sales, posting year-over-year growth of 9.5%. Department stores
accounted for 20.6% of sales, up 39.1% and the specialty channel
accounted for 13.2%, up 1.5% for the year. The hypermarket channel accounted for 8.4% of sales, with 7.1% year-over-year growth,
according to the firm.
Sales of Amore Pacific’s cosmetic unit were $1.4 billion, up
16%. Within cosmetics, the luxury segment represented 63% of
sales, posting a gain of 20%. By brand, Sulwhasoo was up 22%,
Hera gained 14% and Amore Pacific was up 36%, according to
the company. The premium segment of its cosmetics unit accounted for 33% of sales, with brands such as Laneige (up 15%),
Hannule (up 69%) and Iope (up 17%), turning in solid performances.
Sales within Amore Pacific’s Mass Cosmetics & Sulloc division rose 19% for the year to about $304 million. Mis-en-scene
was up 19%, Happy Bath and Sulloc both posted 27% growth
and Ryoe proved especially robust, posting a gain of 62%.
Looking at its international performance, Amore Pacific was
pleased to report that the overseas business turned profitable,
backed by solid sales growth and profitability in all regions.
Sales were $292 million and operating profit was nearly $8 million, according to the company. China represented 42% of overseas sales (+22%), followed by France (29%), Asia, excluding
China, (25%), and the US (3%).
This spring, Amore Pacific rolled out Sulwhasoo into mainland China. The range of premium herbal medicinal cosmetics
is now being sold at Parkson department store and Shin Kong
Place in Beijing. The firm plans to add as many as eight shops
in high-class department stores in other major cities like Shanghai before the end of this year.
The move into China further expands Sulwhasoo’s international presence beyond its Korean routes; it entered Hong Kong
in 2004 and launched in Bergdorf Goodman in New York City in
June 2010. In addition, Amore Pacific opened the doors to the
new Sulwhasoo Spa in Hong Kong in 2010.