Rapid growth of prestige beauty leads LG H&H to record quarter

The company reported that its operating profit grew 13.5% to exceed ₩300bn ($257m) for the first time.

Both sales and net profit achieved double-digit grow of 13% and 14.9% respectively and made records for the best quarterly results the company has ever seen.

The statement added that this quarter marked the company’s 15^th​ consecutive year of growth.

“Sales have increased for 54 quarters since Q3 2005, and operating profit has increased for 56 quarters since Q1 2005, delivering growth for fifteen consecutive years.”​

Prestige leads the pack

The company’s main engine of growth remained its cosmetics division. Sales of cosmetics and operating profit both grew 20.3% and 16.1% YoY respectively.

According to the company, growth of the division was driven by the rapid growth of its prestige beauty portfolio.

“Luxury brands such as History of Whoo, su:m37 and O HUI continued to grow rapidly, leading to growth in the cosmetics business.”​

Furthermore, it highlighted that History of Whoo achieved sales growth of 36% due to high demand from domestic and overseas markets.

The company believes the strong performance of its flagship luxury brand has “solidified its position as Asia's top luxury cosmetics brand”.​

Last year, Whoo became the first Korean brand to cross the two trillion won ($1.78bn) mark in annual sales.

Aside from Whoo, LG H&H noted the potential of its ‘next generation brands’, su:m37 and O HUI.

Sales of su:m37’s premium skin care line LosecSumma grew 54% while O HUI’s own premium range, The First Geniture, drove brand growth with a 13% increase.

The company said it plans to continue investing into the brand to secure its luxury positioning, specifically in the Chinese market.

For instance, O HUI held a gala in March to celebrate the The First Geniture line at the Grand Hyatt Hotel in Seoul to further solidify its image as a luxury brand.

Premium personal care on the rise

Sales of its household goods division also achieved positive sales and operating profit growth despite the recession in the domestic market.

The company said that demand for premium personal care products under this division, including hair, body and oral care, was growing in Watsons stores in China.

Along with swift growth in Korea, the company said it would be ‘raising expectations’​ for premium personal care products.

Sights set on North America

LG H&H has recently acquired Avon North America for $125m to strengthen its presence in the US market.

The company said it plans to use Avon’s existing infrastructure to secure a place for it existing brands in the market.

The investment also puts it in a strategic position to expand to other major global markets such as Canada, South America and Europe.

Earlier this year, LG H&H announced that it was bringing VDL Cosmetics to Canada with a standalone flagship store