Unilever invests in luxury brands to attract new customers in Europe and USA

Unilever is putting into action an initiative to sell more sophisticated products in major markets like Europe and the United States. The company argues that the mass markets in these regions remain limited and the prospects for the emerging countries are not very promising.
"The premium market segments are still growing faster than the average price in many parts of the world," says Jean-Marc Huët, Chief Financial Officer of the company. The initiative, although small, is welcome to the company, since the annual sales of the Unilever fell 2.7% in 2014. Since March, the company bought four brands of skincare products in the segment of high prices-Murad, Dermalogica, Kate Somerville and REN-sold in pharmacies and specialty stores, such as beauty salons and spas. Last year, Unilever created a division that sells cosmetics and personal care products intended for the highest income range.
The company has been expanding its portfolio of luxury brands while its biggest rival, Procter Gamble Co., & abandons some segments to focus on its most popular brands. Recently, the P&G closed deal to sell most of its area of cosmetics, including beauty salons and perfumes, to Coty Inc. for US $ 13 billion.
The strategy focused on the luxury market is risky, since Unilever is known for selling large volumes of products with average prices for middle-class consumers, especially in emerging markets. The company still needs to prove he can win over consumers willing to pay more for sophisticated products in the developed world, says Marin Deboo, an analyst at investment bank Jefferies. "Are different channels to sell, it's a different way of thinking," he says.
The company is targeting its portfolio with a focus on personal care brands, which tend to have higher profit margins, and moving away from the food business, which features a slower pace of growth.