Dr Scheller sells production to Weckerle to increase flexibility

Germany’s Dr Scheller Cosmetics AG is planning to sell its production facility in Eislingen to Weckerle Cosmetics. In fact it says negotiations have already reached a very advanced stage. The deal will include all land, buildings and facilities and both companies have said there will be no job cuts among the 200 employees at the site.

Dr Scheller says that in light of current tough market competition it wants to focus on marketing its brands and believes that without the capital expenditure associated with having its own production it will be able to respond more quickly and flexibly to market trends. At the moment it says its brands, which include Manhattan, Manhattan Clearface, Dr Scheller Naturkosmetik and Phyto Solutions, are competing with global players such as L’Oréal, P&G, Henkel and Beiersdorf who are increasingly bundling production quantities worldwide or even outsourcing.

Under the conditions of the proposed deal, production and the private label business will be picked up by Weckerle, which already produces for a wide range of international customers. In the long-term Weckerle is said to be anticipating additional sales opportunities as a result of the acquisition.

Both companies state: “Dr Scheller Cosmetics wants to concentrate its activities and Weckerle wants to expand so that consequently there is an advantageous situation for all involved.”

Negotiations have this week begun with the works council at Dr Scheller and the aim is for the contract to be signed on 1 April, at which point transfer will take place. As part of the intent to ensure smooth transfer, Weckerle will continue to supply the Dr Scheller products already produced at Eislingen for the next five years.