In a move aimed at better serving African-Americans, Procter & Gamble (PG) has acquired Walker & Co., a Silicon Valley startup that makes beauty and health products exclusively for black and brown people. While the companies are yet to disclose the financial terms of the deal, they said Walker & Co. will operate as an independent entity headed by is present CEO Tristan Walker.
The buyout will help Walker & Co. reach out to more customers across the world while taking advantage of P&G’s advanced technology and supply chain network. Under its new owner, Walker has a chance to expand further by launching new products for people of color, thereby enhancing its value. Surprisingly, most of the leading players in the beauty industry have not made sufficient efforts yet to bring out products for the African-American population.
For P&G, the addition of the exclusive product line will add value to its own offerings in the category, such as Pantene’s Gold Series and Royal Oils Collection under the Head & Shoulders brand. The consumer products conglomerate looks to raise its market share in the untapped segment that is worth about $4.5 billion in the US, supported by the popular grooming products of Walker & Co., including the Bevel and Form Beauty brands.
The buyout will help Walker & Co. reach out to more customers across the world, taking advantage of P&G’s supply chain
The innovative products rolled out by Walker have witnessed steady demand in recent years due to their uniqueness, and the trend is expected to continue going forward. The business segment has immense growth potential considering the demand-supply imbalance, which often leaves the African-American population with limited choices when it comes to beauty care.
Robust beauty sales boost P&G earnings in Q1; stock gains 5%
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P&G shares closed the last session higher, after recovering from their initial losses. They have gained about 3% since the beginning of the year, often outperforming the S&P 500 index. The stock moved up further in early trading Thursday when it was upgraded by Bank of America Merrill Lynch from neutral to buy.
In a similar deal, P&G’s European rival Unilever (UN) last year acquired Sundial Brands, a manufacturer of beauty and health products for people of color.