HUL shifts services biz to Lakme Lever

FMCG player Hindustan Unilever Ltd (HINDUNILVR.NS : 103.5 +2.4) (HUL) has decided to license its Lakme and Lever Ayush brands to its subsidiary Lakme Lever Ltd, which will manage the beauty and wellness services businesses through Lakme salons and Ayush Therapy Centres.

The board of directors has approved the decision. When contacted by mail, a HUL spokesperson responded, "The beauty and wellness services business is an insignificant part of HUL and hence we do not anticipate any impact on HUL's financials."

With the restructuring decision, about less than 100 employees at HUL, which managed the businesses will be transferred to Lakme Lever Pvt Ltd. HUL will hence no longer be directly engaged in this business. Anand Shah, an analyst at Angel Broking said that the move may have been triggered by the need to conduct the businesses more seriously.

"Under a consolidated structure, the business may not get the funds and the seriousness for effective management", he said. The press note sent by HUL indicated that beauty and wellness businesses presented a good opportunity in the wake of rising disposable income and changing lifestyle in urban India.

While HUL's Lakme salons provide beauty services to consumers, its Ayush therapy centres operates in the wellness segment with an 'ayurveda' approach. FMCG player Marico (MARICO.NS : 0 +0) has also been leveraging the opportunity in the wellness business through its Kaya Skin clinics.