The group revealed that it will write off assets worth $1.3 billion from Gillette’s business by the end of this year.
Giant Procter & Gamble (P&G) announced this week that it will make some changes to the Gillette razor brand. Procter & Gamble will take a $2.5 billion charge over the next two fiscal years to implement certain operations restructuring and impairment charges.
The restructuring will take place in some markets, namely Argentina and Nigeria, as evidenced by the group itself. This restructuring process aims to “respond to difficult macroeconomic and financial conditions.”
The group revealed that it will write off assets worth $1.3 billion from Gillette’s business by the end of this year. This decline comes after Procter & Gamble purchased the company for $57 billion in 2005.
The brand currently accounts for 8% of sales in the personal care segment. According to the Wall Street Journal, Procter & Gamble is still paying for Gillette, even after nearly 20 years.
P&G explained that the impairment charge relates to “a decrease in the estimated fair value of Gillette intangible assets with indefinite useful lives due to a high discount rate.”
The company estimated that after purchasing Gillette, its business would improve by 5%, which did not happen. In 2019, the group also took on a liability of $8 billion in the razor blade company due to exchange rate fluctuations.
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