German company Wella is leaving Russia.
After 28 years of operations in Russia, German professional cosmetics manufacturer Wella is ceasing shipments to the country. Beauty salons were actively using its products: Wella hair coloring products accounted for up to 40% of the market. Now, the beauty industry may face problems due to a shift to other brands. Furthermore, salons are not ruling out the possibility that other foreign companies may also stop supplying. Following the publication "B" The Ministry of Industry and Trade announced that Wella products are subject to the parallel import mechanism.
Kommersant has obtained a letter from cosmetics manufacturer Wella Company, in which the company notified its partners of its departure from the Russian market. The letter states that Wella no longer produces or sells products under its brands in Russia, and ownership of the business will be transferred to the local top management team. Natalia Lisina, head of Wella's Russian division, did not immediately respond to Kommersant's request.
Wella was founded in Germany. It has operated in Russia since 1994 and was managed through Wella Rus LLC. In 2021, the company's revenue was 1,7 billion rubles, with a net profit of 208 million rubles. According to the Unified State Register of Legal Entities, Vesna LLC, founded by Natalia Lisina (51%), Dmitry Novikov, Dmitry Zakharchenko, and Victoria Shin (16,33% each), became the owner of Wella Rus on May 26. Vesna also acquired 100% of Kapella LLC, which manages the production facility in Dzerzhinsk, Nizhny Novgorod Region.
Wella's departure is critical for the industry—it was the first foreign manufacturer of professional cosmetics, which launched the industry, says Igor Stoyanov, founder of the Persona beauty salon chain.
Wella products accounted for 40% of the business and premium hair coloring cosmetics marketed by Russian salons, according to Lyalya Sadykova, ombudsman for the Association of Beauty Industry Entrepreneurs.
Ms. Sadykova notes that almost all Wella products were imported, with the exception of the Londa brand, which was localized at a factory in Dzerzhinsk in 2021. She notes that the company's departure could cause difficulties for salons, as switching to cosmetics from other manufacturers will require retraining of their stylists. Furthermore, the expert clarifies that colorists primarily use European and American products, whose manufacturers may also decide to leave the market.
At the same time, Petr Bobrovsky, Executive Director of the Association of Manufacturers of Perfumes, Cosmetics, Household Chemicals, and Hygiene Products, notes that competition in this segment is fierce and there remain quite a few suppliers. A Kommersant source in the industry believes that Russian company Estel could capture Wella's market share.
The new owners may face difficulties setting up new production at the former Wella plant. According to Kapella's financial statements, amid the escalating geopolitical situation in Ukraine, some raw material suppliers have notified the company they will cease shipments indefinitely. Kapella is searching for alternative local suppliers. According to Infoline, the Russian cosmetics and perfumery market turnover increased by 11% in 2021, reaching 840 billion rubles year-on-year.
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