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The global fashion business journal

Jan 28, 20208:14pm

Coty continues its transformation and considers selling its professional cosmetics business

This business unit includes Wella, Clairol, Opi and GHD. The company plans to focus on its cosmetics, perfume and skin care business and “reduce complexity.”

Oct 21, 2019 — 4:00pm
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Coty continues its transformation and considers selling its professional cosmetics business

 

 

Coty continues with its transformation process. The American giant has begun exploring “strategic options” for its professional cosmetic division, which includes the Wella, Clairol, Opi and GHD brands, as well as for its business in Brazil, as explained in a statement.

 

If the company agrees to sell, the capital will be used to amortize debt and return part of the income to shareholders. The decision is part of Coty’s transformation plan and aims to reduce the complexity of the business and focus on perfumery, cosmetics and skin care.

 

“Even with its current good performance, the future growth potentials of the professional cosmetics business are outside the company’s strategic focus,” Coty said. The company explains that both this area and the Brazilian business operate very different from the rest of the group, with its own equipment and distribution channels.

 

 

 

 

In Brazil, Coty has a different portfolio of brands and relies more on direct sales, while professional cosmetics concentrates its distribution in hairdressers, with a presence in more than 250,000 centers in one hundred countries. Both businesses are expected to achieve a revenue of 2.7 billion dollars in 2019. Credit Suisse will be responsible for the analysis of both business lines.

 

Coty operates with licenses of Gucci, Burberry, Hugo Boss and Calvin Klein; own cosmetic brands such as Rimmel, Max Factor or Covergirl and skin care firms such as Lancaster or Philosophy. The company has been restructuring for several years after the purchase of Procter&Gamble’s cosmetics business in 2016. In July, Coty announced a new action plan with the goal of recovering the profitability path and reducing its debt, which will mean an investment of 600 million of dollars.

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