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British consumer goods firm PZ Cussons plc, which acquired the Australian premium hair care brand Fudge Thursday for 25.5 million pounds, or $39.9 million at current exchange, in cash, has big plans for the edgy hair care brand. The brand was purchased through PZ Cussons Beauty, a division formed last year that comprises the St. Tropez, Sanctuary and Charles Worthington franchises.
This story first appeared in the January 6, 2012 issue of WWD. Subscribe Today.
Fudge, which PZ Cussons bought from Australian private equity firm Sabre Group, is sold mainly in salons in the U.K., Australia and New Zealand, and is best known for its line of hairstyling products, including the Hair Shaper cream. In the year ended June 30, the company registered revenues of 15.7 million pounds, or $24.9 million at average exchange for the 12-month period. The acquisition is expected to be completed by the end of January.
“Fudge is a very attitudinal, fun cult brand with a lot of potential, particularly digitally,” Michelle Feeney, chief executive officer of PZ Cussons Beauty, told WWD in a phone interview Thursday, while assessing the 20-year-old hair care brand.
Noting that PZ Cussons plc.’s ceo, Alex Kanellis, is keen to further develop Fudge’s international potential, that will be one of Feeney’s division’s highest priorities. “Fudge has really only been deeply established in the U.K. and Australia, but has tremendous global potential which has not been tapped in the past,” said Feeney, noting that 50 percent of Fudge’s global sales are currently done in the U.K. and Europe, and nearly 50 percent are done in Australia and New Zealand.
“In the U.S., Fudge has in the past been sold in a few salons via a distributor, but we are formulating a new U.S. distribution plan, which will include both digital and brick-and-mortar consumer sales,” said Feeney.
The Fudge U.S. strategy is expected to be finalized later this year, and it is likely to include Cussons’ existing U.S. retail partners, namely Sephora, sephora.com, QVC, qvc.com, HSN and hsn.com. Asia and Eastern Europe are also immediate targets for growth, Feeney said.
In the U.K., about 60 percent of Fudge’s business is done with men 18 to 35 years of age, while the balance is done by female buyers. Feeney estimated that given the brand’s positioning and target consumer, as much as 60 percent of Fudge’s sales in the U.S. — and a significant percentage globally — could be done digitally going forward.
Cussons is said to be actively seeking new beauty acquisitions. “Following this acquisition, our balance sheet remains strong, giving us flexibility for further investment opportunities as they arise,” stated Kanellis. Added Feeney: “Our strategy is really to bring expertise-driven products at an accessible price point. Not mass, but accessible to many — as is seen in our retail partners, including Boots, Sephora, QVC and HSN, and online.”
Feeney noted that international expansion is also in the plans for the division’s other brands. “St.Tropez is entering all Sephora doors in the U.S., including those in J.C. Penney, and we are also taking it to Brazil and Mexico,” said Feeney of the self-tanning and sun care brand. “We are also looking at expanding the Sanctuary spa brand to the U.S. from June onward. Charles Worthington is also currently consulting with us on the brand which bears his name.”