NEW YORK — Unilever has dropped Finesse and Aqua Net from its portfolio, selling the hair care brands to Lornamead Brands Inc. for an estimated $130 million, according to speculation by industry sources.
The move whittles down Unilever's stable of hair care brands to five, including Dove and Sunsilk, which is set to enter the U.S. market next month.
"This agreement takes us a step further in reshaping our hair care portfolio of brands in North America," John Rice, president of Unilever Americas, said in a statement released Tuesday. "It will enable us to focus on bringing innovation to market through our strong local and global brands."
Unilever stated that together, the Finesse and Aqua Net brands generated combined revenue of $85 million in 2005. Neither firm would comment on the financial terms of the deal.
Lornamead chief executive officer Mike Jatania updated mass retailers on the acquisition of the two brands — which excludes Aqua Net in Mexico — at the National Association of Chain Drug Stores' annual meeting held in Palm Beach, Fla., this week.
Jatania noted the main prize is Finesse. "This acquisition gives us two heritage brands, which are both extremely well known," said Jatania, recalling the tag line, "Sometimes you need a little Finesse, sometimes you need a lot." Jatania added that immediate next steps include developing a "strong marketing program for Finesse." Ads, slated to break this summer, will focus on Finesse's formulas, which are designed to create touchability and softness.
Both Finesse and Aqua Net have experienced sales declines as advertising support has dried up over the last three to five years. Finesse saw sales dive 22.6 percent to $43.5 million in the food, drug and mass channels, excluding Wal-Mart, for the 52-weeks ended March 19, according to Information Resources Inc. Aqua Net sales dipped 6.2 percent to $12.1 million over the same period.
In recent years, Unilever has funneled much of its efforts into building Dove — a $1 billion brand in the U.S. — into a leading hair care brand. Dove hair care sales increased 15 percent to $104.7 million over the 52-week period ended March 19, excluding Wal-Mart, according to IRI.Last fall, Dove reformulated its shampoos and conditioners and repackaged the line in a bottle designed to resemble a Dove Beauty Bar. This spring, it pushed into premium price points with treatment-inspired collections, such as Dove Advanced Care for damaged locks and Dove Advanced Color Care for color-treated hair.
The upcoming introduction of Sunsilk, a 24-item shampoo, conditioner and styling line targeting young women, is considered Unilever's biggest hair care launch since Dove.
For Lornamead, Finesse and Aqua Net give the U.K.-based company a better foothold in the U.S. market. The company's main goal is to buy heritage brands that have lacked focus as their former parent companies pursue global brands. "We want to revive them," Jatania said. The company has acquired more than 30 brands in six years, including Natural White and Yardley in the U.S. Jatania anticipates that over the next five years, Lornamead will reach revenues from $500 million to $1 billion in the U.S.
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