L'Oreal USA merges Soft Sheen and Carson

Drug Store News, Sept 13, 2000

NEW YORK -- Just days after getting Justice Department approval for the acquisition of Carson Products, L'Oreal USA has moved to merge its Soft Sheen Products and Carson Products businesses into a new division, which will be based in Chicago.

Guy Peyrelongue, president and chief executive of L'Oreal USA, said that establishing this new unit is in line with the company's objective to be "the global beauty leader for people of African descent worldwide."

Terri Gardner, president of Soft Sheen, becomes president of the new division and continues her role on L'Oreal's executive committee. She will direct the Soft Sheen/Carson division's domestic business, including the merging of the two organizations, worldwide brand development, day-to-day operations and financial management.

Malcolm Yesner, president and chief executive of Carson, becomes executive vice president of global business development. He will be responsible for extending the division's business strategies utilizing the L'Oreal Group organization, and capitalizing on opportunities to expand the Soft Sheen/Carson business worldwide. Gardner and Yesner report to Joe Campinell, senior vice president of L'Oreal USA and president of the L'Oreal Consumer Products division.

The announcements come just days after L'Oreal reached an agreement with the Department of Justice that allows L'Oreal to acquire Carson in a $79 million cash tender offer. Terms of that agreement called for L'Oreal to divest the Johnson Products name and "Gentle Treatment" and "Ultra Sheen Supreme" relaxer brands (with their related maintenance products), which are currently marketed under the Johnson Products name.

The Justice Department said the merger, without the divestiture, would have given L'Oreal control of about 50 percent of the retail sales of women's hair relaxer kits and three of the top five selling brands.

"Now that we have clearance from the Department of Justice, we are ready to move forward," said Peyrelongue. 'With the divestiture it makes sense to combine the entities and utilize the strengths of Soft Sheen and Carson. The new Soft Sheen/Carson division, along with L'Oreal's outstanding research capabilities, will produce better product innovation for the consumer and advancements that the category has never before seen."

The new Soft Sheen/Carson division will be headquartered in Chicago's South Side community. As part of this move, Carson's research and development will combine with Soft Sheen's to establish L'Oreal's ethnic beauty research and development center in Chicago. The center, which opens in early 2001, has the L'Oreal mandate to focus exclusively on the beauty needs of consumers of African descent. Additionally, Carson's Savannah manufacturing and distribution will stay in Savannah, while its Johnson manufacturing facility in Chicago, remains under review until the completion of the divestiture process.