St Tropez

St Tropez could be worth £100m, according to analysts

PZ Cussons is selling self-tanning brand St Tropez after admitting the group is “too complex for its size”.

The decision follows a strategic review of the plc’s brands and geographies over the past year.

Alongside the disposal of St Tropez, PZ Cussons is also exploring options for the African business after a drastic devaluation of the currency in Nigeria smashed profitability at the group.

Proceeds from any transactions will invested behind organic growth and used to reduce debt.

CEO Jonathan Myers said the plans would “transform” the portfolio and refocus on where the business can be most competitive.

PZ Cussons bought St Tropez from PE firm LDC for £62.5m in 2010. Analysts estimated the brand could be worth about £100m today.

The group said St Tropez had grown “significantly” since acquisition, establishing a leading position in the US self-tanning market.

“Given the strength of the brand’s equity, there remains significant long-term growth potential in the US and in both new geographies and category adjacencies,” a statement to the stock exchange said.

“This growth will however be harder to realise under PZ Cussons’ ownership, given the need to allocate resources across our diverse geographic and category footprint. We therefore plan to realise shareholder value by initiating a process to sell the brand to an owner better placed to capture the brand’s significant long-term potential.”

Myers added: “The actions we are taking will crystallise value for our investors from assets better suited to alternative ownership structures.

“This will enable us to invest our resources in the key geographies and categories in which we can win and generate superior returns. We are transforming PZ Cussons into a business with stronger brands in a more focused portfolio, delivering sustainable profitable growth.”

Shares in the group are up 18% to 101.8p over the past five days.