Pure Beauty

Henkel sells off Russian business for €600 million

By Alessandro Carrara | Published: 24-Apr-2023

Augment Investments, Kismet Capital Group and Elbrus Services will be acquired by a group of local investors

Henkel, the maker of Schwarzkopf, has sold its business in Russia for €600m.

A group of local financial investors will acquire the personal care giant’s operations in the country, including Augment Investments, Kismet Capital Group and Elbrus Services.

Russian authorities approved the deal, but have not yet confirmed a completion date.

“All acquirers have established and long-standing business relationships in Western countries and are not subject to EU or US sanctions,” Henkel said in a statement.

Henkel originally defended its decision to continue operating in Russia after its invasion of Ukraine in February 2022.

The German conglomerate said at the time that a full withdrawal could have “far-fetching” consequences, in consideration of the 2,500 staff it had in the country.

However, the company went on to officially announce its decision to exit its operations in Russia by April 2023.

Henkel joins the number of other beauty businesses which have reduced or outright stopped operations in response to the war.

Estée Lauder ceased trading in Russia in the first two weeks of the invasion and confirmed in October 2022 that it was suspending business in the country. 

In July 2022, Sephora sold 100% of shares in its Russian subsidiary to the business’ local General Manager.

Henkel also owns Nature Box

Henkel also owns Nature Box

The LVMH-owned beauty retail chain has since operated under the Ile de Beauté brand in the country.

Unilever, meanwhile, has faced backlash in recent months over its decision to continue doing business in Russia.

The company announced a 9% underlying sales increase for full-year 2022, but analysts spotted that Unilever had an asset position of €900m in Russia.

Business operations in the country had contributed to 1.4% of turnover and 2% of the group’s net profit.

“We understand why there are calls for Unilever to leave Russia,” FMCG giant said in a statement at the time.

“We also want to be clear that we are not trying to protect or manage our business in Russia.

“However, for companies like Unilever, which have a significant physical presence in the country, exiting is not straightforward.”

The consumer goods goliath recently confirmed it is creating a new €20m production facility in the Kyiv region of Ukraine.

Unilever said the new Ukrainian factory supports its long-term commitment to the country, in addition to celebrating its 30th year of operating there

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