New business model emerging at H20 Plus

By Deanna Utroske

- Last updated on GMT

New business model emerging at H20 Plus

Related tags H20 plus Chicago tribune Ceo joy chen

The personal care company is prepping for a brand relaunch this spring; in the meantime H20 Plus has shuttered another store and is halting operation at its Chicago area manufacturing facility. 

This week Becky Yerak, writing for the Chicago Tribune, reported on the company’s closure of its Michigan Avenue retail location. It’s a move that H2O Plus chairman and CEO Joy Chen told her is “part of our new business model and strategy.”

What’s next

H20 Plus makes and sells skin care, bath and body care, as well as hair care products, all formulated with ingredients derived from the ocean.

The impending “brand relaunch would be ‘retaining’ what has made the brand successful,” ​Chen tells Yerak. Presumably that means purified ocean water and sea ingredients will continue to be integral to H20 Plus.  

"It is a very exciting time for the brand," said Chen, who took the helm of the company last February. "The relaunch may bring in the pop-up store concept but not permanent retail."

Challenging times

Chen has led the company for just under a year and is bringing change to H20 Plus for good reason.  As she explained to the press earlier, “H2O Plus has been unprofitable for at least five years.”

“A series of ownership and leadership changes, lack of product innovation, increased competition in the natural skin care space and the closing of almost all of its branded stores have cost it business,” ​she said.

The company’s physical presence in the States is still dwindling. “At its peak, the company had more than 300 stores,” ​reports Yerak. “Last year, it had just two, including the one in Chicago.”

Relocation strategy

Plans have been in place for some time now for the personal care products maker to close down its Chicago-area manufacturing. In fact, going forward H20 Plus will outsource those operations and “shift completely to third-party manufacturing,”as Cosmetics Design reported​ last summer.

“After careful analysis it became clear…that the current manufacturing structure was not in the long-term financial interests of the company,”​ Chen told the press at the time.

Chicago will no longer be home to company headquarters either. The business, which is owned by Pola Orbis Holdings of Japan, is moving to San Francisco, California, where it can be closer to Asian markets.

“San Francisco’s…strong global connections make it an ideal location for businesses looking to expand into Asia and other international markets,”​ Todd Rufo, director of San Francisco’s Office of Economic and Workforce Development, told the press when the H20 Plus move was first announced.

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