LG H&H shares were up 1.4 percent at 320,500 won ($232) as of 2 p.m., outperforming a declining KOSPI.
The exit is expected to improve North American earnings by removing an unprofitable operation and freeing marketing and investment resources for brands with stronger growth prospects.
LG H&H's U.S. unit agreed Monday to sell its entire stake in The Avon Company to Stratford Worldwide, an affiliate of global investment firm Regent, according to a regulatory filing. The disclosed disposal value is $6 million, or about 8.4 billion won, with the final price to be determined when the transaction closes.
The deal is expected to close Sept. 1. Regent already owns Avon International after acquiring the business from Brazil's Natura & Co. in January, meaning the transaction will reunite Avon's North American and international operations under common ownership for the first time since 2016.
The sale price is less than 5 percent of the $125 million, or roughly 145 billion won at the time, that LG H&H paid to acquire New Avon LLC, now The Avon Company, in 2019.
Before the transaction closes, LG H&H USA will convert $205.5 million it previously lent to Avon into equity. The conversion, worth about 286.3 billion won, is intended to settle financial ties between the companies and does not require additional cash or change LG H&H's ownership before the sale.
Avon's results will be removed from LG H&H's consolidated earnings after the sale. The business generated 269.2 billion won in revenue last year but posted a net loss of 30.1 billion won.
Its liabilities also exceeded assets by 136.1 billion won at the end of last year, according to Hanwha Investment & Securities, underscoring the financial burden LG H&H is removing from its North American portfolio.
The steep markdown from the 2019 purchase price reflects how Avon's role in LG H&H's North American strategy has changed.
"After a careful strategic review of our global portfolio, we believe this is the right time to further sharpen LG H&H's focus on our core global beauty and retail growth priorities," LG H&H CEO Lee Sun-joo said in a statement.
When LG H&H acquired Avon seven years ago, it had only a limited distribution network of its own in the region. Avon's established sales, logistics and distribution infrastructure provided a foothold for expansion.
LG H&H's own brands however gained traction through major retailers and digital channels in line with the rise of K-beauty.
North American revenue jumped 47.3 percent from a year earlier to 205.8 billion won in the second quarter. The region surpassed China in sales for the first time, while LG H&H's own brands accounted for about half of North American revenue, according to Hanwha Investment & Securities.
Growth was led in part by premium hair and scalp-care brand Dr. Groot. The broader North American operation also remained profitable even excluding one-off U.S. tariff refunds, Hanwha said.
LG H&H is now directing more resources toward Dr. Groot, skincare brands CNP and belif and cosmetics label The Face Shop. The company is expanding those brands across major retail and online channels including Costco, Sephora, Ulta Beauty, Amazon and TikTok.
The shift is part of LG H&H's broader plan to reorganize North America around retail- and digital-driven K-beauty and wellness brands rather than Avon's traditional direct-selling model. The company said the disposal would allow it to sharpen its global portfolio around businesses where it sees stronger growth potential.
Analysts expect the sale to reduce LG H&H's consolidated revenue by roughly Avon's annual sales. They nevertheless see a potential earnings benefit from eliminating recurring losses and redirecting spending toward more profitable brands.
AJP Takeaways
• LG Household & Health Care shares rose 1.4 percent to 320,500 won as of 2 p.m. on Aug. 25, 2026, as investors welcomed the company's decision to sell The Avon Company and focus more resources on faster-growing K-beauty brands in North America.
• LG H&H USA agreed on Aug. 24, 2026, to sell its entire stake in The Avon Company to Stratford Worldwide for $6 million, or about 8.4 billion won, less than 5 percent of the $125 million LG Household & Health Care paid for the business in 2019.
• The Avon Company generated 269.2 billion won in revenue but posted a net loss of 30.1 billion won in 2025, while its liabilities exceeded assets by 136.1 billion won, making the disposal a potential boost to LG Household & Health Care's North American profitability.
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