FMCG producer Henkel is merging two of its three divisions: the laundry & home care and beauty care divisions will fuse. Only the adhesive technologies department will remain a separate entity. Staff will feel the consequences.
Beauty brands up for sale
Henkel is creating an umbrella business unit for all its consumer brands, including all laundry and cleaning products and the beauty care segment. Everything from Schwarzkopf shampoo to Persil detergent will be grouped. The holding company denies that it will fully separate the consumer business in the long term but says it wants to “optimise” its portfolio.
The transformation process starts this year and is expected to continue until 2023. Therefore, the consequences will be felt as early as this year, especially in the beauty segment: Henkel suggests that some beauty brands may be sold or discontinued.
Talks with trade unions
Wolfgang König, who is currently vice-president of the beauty care division, will become head of the new consumer unit. Bruno Piacenza, now head of the laundry & home care business, will leave at the latest by the end of this year. There will also be consequences for employees, although Henkel does not yet want to say what they can expect. They say somewhat cryptically that there will be implications for employees in both divisions worldwide. The German group is already starting the consultation rounds with the trade unions, which suggests redundancies.
In 2021, however, Henkel’s overall performance was good. The adhesives, in particular, did well, with double-digit growth despite soaring raw materials prices, supply chain disruptions and the pandemic. On a preliminary basis, total sales of the Henkel Group increased by 7.8 per cent, with 1.4 per cent growth in beauty care and 3.9 per cent in laundry & home care. In the future, the new consumer brands division should ensure annual sales growth of 3 to 4 per cent and a profit margin of around 5 per cent.