Imperial Leather manufacturer PZ Cussons is set to offload its St Tropez tanning line and is scrutinising its African ventures due to persistent challenges in Nigeria.
The Manchester-headquartered firm announced that after a strategic assessment, it aims to "refocus the group's portfolio on where it can be most competitive". Intent on finding a new proprietor for St Tropez, which PZ Cussons acquired for £62.5million back in 2010, the company believes a different owner could better realise the brand's considerable future promise.
Despite making strides in enhancing its African operations, PZ Cussons described it as a "complex group of assets" and is therefore exploring strategic alternatives for this segment of its business. PZ Cussons has felt the sting of severe fluctuations in Nigeria's economy, a crucial market accounting for over one-third of its sales, culminating in a £94.2million loss for the half-year ending in December.
The company has been grappling with a protracted downturn in the Nigerian naira's value, which it reported was down by an average of 60% compared to last year in the first quarter of 2024, while inflation has rocketed to nearly 30%, a peak not seen in three decades. In a recent update, PZ Cussons disclosed a sharp 23.7% revenue drop for the quarter ending March 31, but noted that when adjusting for currency fluctuations, like-for-like sales actually saw a 6.4% increase.
Sales by volume saw a slight uptick of 0.2% against a first-half slump of 4.9%, buoyed by better performance across UK brands. Outside Africa, like-for-like revenues dipped by 2.9%, compared to a 3.9% fall in the first half.
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PZ Cussons commented: "In addition to the challenges of its significant exposure to Nigeria, the group is too complex for its size, with financial and human resources spread too thinly to generate consistent returns. This means its competitive advantages have been constrained in comparison to those of both larger multinational companies and some focused, smaller ones."
Chief executive Jonathan Myers said: "The macro-economic challenges and complexities associated with operating in Nigeria are significant and there is much more to do to unlock the full potential of the business. As such, we have undertaken a strategic review of our brands and geographies and have embarked on plans to transform our portfolio, refocusing on where the business can be most competitive."
The firm has stated that proceeds from any sales will be channelled into growth investments, including considering targeted acquisitions, as well as reducing debt.
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