Core Views - The article discusses the contrasting strategies of two major beauty groups, L'Oréal and Unilever, highlighting L'Oréal's aggressive acquisition approach and Unilever's focus on divesting non-core assets [2][8]. Group 1: L'Oréal's Acquisition Strategy - L'Oréal announced the acquisition of an additional 10% stake in Galderma, increasing its ownership from 10% to 20%, with plans to explore further scientific research collaborations [1][6]. - The acquisition is part of L'Oréal's ambition to penetrate the rapidly growing medical aesthetics market, alongside its investments in high-end and clean beauty segments [6][8]. - In October, L'Oréal made a significant investment of €4 billion to acquire beauty licenses from Kering Group, indicating a strong recovery in its performance, particularly in the North Asia region [6][7]. Group 2: Unilever's Divestment Strategy - Unilever is undergoing a restructuring process, focusing on core businesses by divesting over 20 non-core beauty and personal care brands, including the planned spin-off of its ice cream business [1][7]. - The CEO of Unilever emphasized that the spin-off aims to create a more streamlined company focused on higher profit margins in beauty and personal care sectors [7][8]. - Unilever's recent quarterly results showed improvement in sales growth after excluding the ice cream business, indicating a positive trend in its core operations [7][8]. Group 3: Industry Trends and Brand Matrix - The contrasting strategies of L'Oréal and Unilever reflect a broader industry trend where companies are either expanding their brand portfolios or optimizing them by shedding non-core assets [8][9]. - The ideal brand matrix should exhibit strategic synergy, growth gradient, and profit orientation, allowing companies to withstand market fluctuations [10]. - Other beauty brands, including Estée Lauder, are also reviewing their brand portfolios, indicating a shift towards optimizing brand performance and profitability [9].

Core Insights - Unilever is undergoing significant strategic transformation amid performance pressures, including layoffs, leadership changes, and divestitures [2][6] Financial Performance - For the first nine months of 2025, Unilever reported a revenue of €44.8 billion, a year-on-year decline of 3.3% [3] - All business segments experienced revenue declines, with the largest drop in home care at 5.3%, followed by ice cream at 4.2%, and beauty & health and food segments both around 3% [3] - In Q3, sales amounted to €14.7 billion, down 3.5% year-on-year, but underlying sales grew by 3.9% [3] - The European market showed a slight revenue increase of 1.9%, while the Americas faced the largest decline at 5.1% [3] Strategic Challenges - Unilever's revenue growth has been sluggish, with a mere 1.9% increase in FY2024 and a net profit decline for two consecutive years [4] - The company faces intense competition from rivals like Procter & Gamble and L'Oréal, alongside changing consumer preferences towards natural and organic products [4] - Rising raw material costs have further pressured profit margins [4] Reform Initiatives - CEO Fernando Fernandez has identified three key reform areas: eliminating inefficient businesses, focusing on high-margin growth sectors, and enhancing digital capabilities [4][6] - The company plans to cut approximately 7,500 jobs globally, representing about 5.9% of its workforce, to save around $800 million [6] Market Dynamics - In China, Unilever's basic sales returned to low single-digit growth in Q3, attributed to targeted marketing strategies and a premium product mix [4][5] - The domestic consumption stimulus policies have revitalized the market, providing a favorable environment for Unilever's products [5] Business Adjustments - Unilever has divested non-core beauty and personal care brands, including Elida Beauty and its ice cream business, to focus on more sustainable and growth-oriented segments [6][7] - The planned spin-off of the ice cream business is expected to be completed by Q4 2025, with anticipated improvements in operating profit margins [7]