Global hair care brand Wella has withdrawn from the domestic market. According to industry sources on the 2nd, Areteon, Wella's domestic distributor, informed over 2,000 salons that have been supplying Wella products of this decision and ended the operation of its brand mall as of the end of last month.
This business cessation is said to be due to a decision by the global headquarters. Areteon noted, "Due to the global headquarters' sudden and unilateral decision for Wella to completely withdraw from the Korean market, we are unable to supply Wella products starting February," adding, "We have requested Wella's global headquarters multiple times to reverse this decision, but unfortunately, we were unable to overturn that decision."
Founded in Germany in 1880, Wella was acquired by Procter & Gamble (P&G) in 2003, and in 2015, the cosmetics corporation Coty acquired some of P&G's beauty brands along with Wella, resulting in a change of ownership. Subsequently, after the global private equity firm Kohlberg Kravis Roberts (KKR) acquired 60% of Coty's hair and nail institutional sector, Wella is now operating under the Wella Company as an independent entity.
Industry sources report that Coty sold its hair and nail business, including Wella, due to the impact of COVID-19 on the hair business. With salons closed worldwide and consumers increasing their purchases of at-home dye products, Coty's professional beauty division sales dropped by 23% year-over-year in the first quarter of 2020.
However, Wella's sales have shown signs of recovery since then. According to U.S. fashion magazine WWD, Wella's 2023 sales reached $2.19 billion (approximately 2.858 trillion won at the average exchange rate at that time), an increase of about 8% compared to the previous year.
Wella entered the domestic market in 1981. By the 1990s, its market share approached 40%, prompting the establishment of a production facility in Ansan, Gyeonggi Province, to self-supply products. However, as the ownership of the global headquarters changed, the domestic distributor also changed several times.
Until recently, SP Distribution Korea has been responsible for Wella's domestic distribution for 14 years. SP Distribution Korea Co., Ltd. changed its corporate name to Areteon Co., Ltd. at the end of last year.
Many in the industry cite the decline in demand for existing products due to the emergence of various hair dye products, including self-dyeing kits, as a reason for Wella's withdrawal. An industry insider stated, "It has been quite some time since we used Wella hair products as various competitors' products have been launched and trends have changed. The same goes for L'Oréal products."
Instead of ending the Wella business, Areteon has introduced FIOLE, a hair salon dye from Japan's Takigawa Group, starting last month. Founded in 1931, Takigawa Group distributes over 50,000 products in the hair, aesthetics, and medical fields. In 2008, they established an independent entity, Fiore Cosmetics, and have achieved an average annual sales growth of 20% over 15 years in the global market.