LG Household & Health Care Turns to North American Market... Acquires Creme Shop for 150 Billion KRW

by Moon Hyewon

Published 21 Apr.2022 10:54(KST)

The flagship product of Kremshop.

[Asia Economy Reporter Moon Hyewon] LG Household & Health Care is intensifying its North American market strategy through the acquisition of the U.S. cosmetics manufacturing and distribution company, The Cr?me Shop (The Crem Shop).

LG Household & Health Care announced on the 21st that it recently signed a contract to acquire 65% of The Cr?me Shop's shares for $120 million (approximately 148.5 billion KRW). This acquisition is the largest since the purchase of Physiogel's Asia and North America business rights for 192.3 billion KRW in May 2020.

Founded in 2012 by a Korean-American, The Cr?me Shop is a mid-priced cosmetics brand popular among the U.S. MZ generation (Millennials + Generation Z). It sells skincare and color cosmetics featuring various character designs such as Hello Kitty and Disney, as well as beauty accessories, maintaining strong sales growth. Recently, it also launched collaboration products with Naver Line Friends and BTS characters.

The Cr?me Shop's sales last year were approximately 47 billion KRW, with an annual sales growth rate exceeding 30% over the past three years. Despite operating mainly through offline retail channels like Ulta Beauty and CVS during the COVID-19 pandemic, The Cr?me Shop demonstrated remarkable growth. It is currently expanding offline channels by starting to enter Walmart. After the pandemic, it has been actively developing its own online mall and is preparing for the next stage of growth through digital channels such as Amazon.

LG Household & Health Care plans to secure group competitiveness in the North American market through this acquisition. Cha Seok-yong, Vice Chairman of LG Household & Health Care, stated in this year’s New Year's address, "To leap forward as a global luxury beauty company, we must expand our business in North America, the largest market and a trendsetter." An LG Household & Health Care official emphasized, "As interest in K-beauty continues to rise due to the strength of K-pop and K-content, we will nurture our American business by leveraging The Cr?me Shop’s local marketing and sales capabilities."