P&G to Sell Noxzema to Alberto-Culver

P&G to Sell Noxzema to Alberto-Culver

P&G to Sell Noxzema to Alberto-Culver

Sources revealed  that Alberto-Culver Co. of Melrose Park, Ill., will acquire Noxzema, which P&G has owned since 1989. A sale price was not available. P&G spokesman Paul Fox declined to confirm the deal on Sunday, saying the company does not comment on rumors.

Alberto-Culver was founded in 1955 and bills itself as the fourth largest hair-care products maker in the U.S. and the second-largest in the United Kingdom. Some of its brands, including Alberto VO5, TRESemme and Soft and Beautiful compete on shelves with P&G brands like Pantene, Herbal Essences and Clairol. But Noxzema would complement Alberto-Culver’s St. Ives skincare brand. Alberto-Culver The company reported net sales of $1.5 billion in the fiscal year that ended Sept. 30, 2007.

P&G’s divestiture of Noxzema fits a broad strategy of shedding under-performing brands to focus on higher-margin ones. This year, P&G sold ThermaCare heat wraps, and the sale of Folgers coffee to J.M. Smucker Co. is pending.

But perhaps nowhere across P&G’s businesses is the strategy more evident than in its beauty unit, which includes skin and haircare products. In its 2007 fiscal year, P&G made $281 million from the sale of Pert shampoo, Sure deodorant “and several non-strategic minor Beauty brands,” P&G said in its annual report. The company also has sold several other “minor” beauty brands this year.

At the same time, P&G is buying beauty businesses that promise higher returns and new retail channels. In March, it spent nearly $381 million in cash to buy Frederic Fekkai & Co., which makes upscale hair products that are sold in salons and department stores. Last Wednesday, it announced the purchase of Nioxin Research Laboratories Inc., which makes products for people with thinning hair, for an undisclosed sum.

P&G has been tightening its focus on the beauty brands it has kept.

Industry-wide sales of facial care products are expected to grow 22 percent in the U.S. by 2012, according to consumer research firm Mintel International Inc. But while P&G has increased marketing spending on skincare brands Olay and SK-II, which retail for higher prices than Noxzema, the company cut Noxzema’s advertising budget by 84 percent between 2003 and 2007, according to TNS Media Intelligence, which tracks brands’ advertising spending.

P&G acquired Noxzema when it bought Noxell Corp. for $1.3 billion in 1989.

Noxzema skin-care products are cleansers and moisturizers and commonly are used for sunburn treatment.

Alberto-Culver Buys Noxzema Skin Care Brand

Alberto-Culver Company today announced that it had signed an agreement to acquire the worldwide rights and trademarks to the Noxzema skin care brand from The Procter & Gamble Company. Under the agreement P&G to retain Noxzema business in Western Europe.

A purchase price was not disclosed.

The agreement includes the existing business in the United States, Canada and portions of Latin America. Procter & Gamble will continue to operate its existing Noxzema shave care, antiperspirant/deodorant, body wash and body soap business in portions of Western Europe. The transaction is subject to customary closing conditions, including obtaining certain regulatory approvals.

Commenting on the agreement, Alberto-Culver president and chief executive officer V. James Marino said, "Noxzema is an iconic U.S. skin care brand and our team is very excited to add Noxzema to our beauty care product portfolio. The Noxzema brand has great equity among consumers and, together with our existing St. Ives skin care brand, will provide us with significant opportunities for growth in the skin care category."

Carol Lavin Bernick, executive chairman of the company, stated, "With the pending acquisition of Noxzema, the board reaffirms our commitment and focus on skin care. Noxzema is a brand with strong potential for our existing portfolio."

Alberto-Culver Company manufactures, distributes and markets leading beauty care products including TRESemme, Alberto VO5, Nexxus and St. Ives in the United States and internationally. Several of its household/grocery products such as Mrs. Dash and Static Guard are niche category leaders in the U.S. It is also the second largest producer in the world of products for the ethnic hair care market with leading brands including Motions and Soft & Beautiful.

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