Coty Inc. is carrying out a strategic review of its mass color cosmetics business, as well as its operations in Brazil.
The strategic review will focus on Coty’s $1.2 billion revenue mass color cosmetics business, including brands such as CoverGirl, Rimmel, Sally Hansen and Max Factor, and its $400 million revenue Brazil business, composed of local Brazilian brands. The review, being carried out by Citi, will assess a full range of alternatives including partnerships, divestitures and spin-offs.
As part of this, Gordon von Bretten, Coty board member and former chief transformation officer, has been tapped to lead consumer beauty as president, reporting to Coty CEO Sue Nabi. He will also lead the strategic review and join Coty’s executive committee.
“We are taking decisive steps on consumer beauty and I am honored to lead this next phase of value creation together with Ms. Nabi,” said von Bretten. “Our agenda is clear: realize the full potential of our market-leading brands by focusing on the portfolio, elevating product excellence, and driving productivity with discipline so that performance is visible in growth, margin expansion, and cash generation.”
At the same time, Stefano Curti, chief brands officer of consumer beauty, and Alexis Vaganay, chief commercial officer of consumer beauty, will step down from their roles.
WWD previously reported in June that the company was in the very early stages of exploring deal options. At the time, a number of sources told WWD that Coty was exploring a potential sell-off in two parts. That would involve its Luxury division, counting brands such as Gucci, Burberry, Jil Sander and Hugo Boss, and its Consumer division, with mass brands including Covergirl, Max Factor and Rimmel London.
Now, it appears to be doubling down on its prestige business, and combining mass and prestige fragrances. This will mean that Jean Holtzmann, chief brand officer, prestige, will now oversee Adidas, Bruno banani, David Beckham, Leger, Nautica, Vera Wang and Mexx, in addition to prestige.
Nabi said, “By more closely integrating all our fragrance and scenting brands, we unlock the full power of our scale. The fragrance category continues to outperform the global beauty market and already drives the majority of our revenues and profits. Coty has a proven right to win at all price points of scenting, from $5 to $500, and is already making strong headway in the exciting new $7 billion mist market.”
Burberry Goddess, released in 2023, remains Coty’s biggest launch ever, while Hugo Boss became the number-two men’s fragrance franchise in Europe in the second half of last year.
Coty said its prestige division will continue to steadily grow its cosmetics and skin care businesses. That includes Orveda and Kylie Cosmetics.
Coty reported a net loss of $72.1 million in its fourth quarter. The adjusted EPS loss was 5 cents a share, below forecasts for a 1 cent profit.
Net revenue was $1.25 billion in the fourth quarter ended June 30, down 8 percent year-over-year, but above Wall Street forecasts.