Coty Explores Potential Sale of Luxury and Consumer Divisions

Coty, one of the most historic groups in the cosmetics sector, could be about to change hands. According to WWD, citing market sources, the New York-based company, listed in Paris and Wall Street, has begun to explore its sale. The group is considering a split between its luxury and mass consumer divisions, given the difficulties in finding a single buyer in the current market context.

The talks, in preliminary stages, suggest that the luxury division, which operates licenses such as Gucci, Burberry, Hugo Boss and Jil Sander, could be the first to leave Coty's perimeter. The company would already be in contact with Interparfums, which would have made an initial offer to recover, at least, the Burberry license, which it managed until 2013.

One of Coty's main assets, however, is Gucci Beauty. But its future seems to have an expiration date, given that the license was originally signed for fifty years and would expire in 2028. Analysts have long assumed that Kering, its parent company, will internalize it and integrate it into Kering Beauté, launched in 2023 after the purchase of Creed for €3.5 billion. The arrival of the French group's new CEO, Luca de Meo, will be key in this process over the coming months.

In addition, the sale of the fragrance business could take the form of a strategic alliance or merger rather than an outright acquisition.

Coty will face the obstacle of mass consumption to confront its future

But Coty does not have all the arguments in its favor. If the luxury business continues to arouse interest despite the crisis, the mass consumer business generates doubts. Brands such as Covergirl, Rimmel London or Max Factor are not going through their best moment. Net sales of this division fell by 9% in the third fiscal quarter, and Coty has reportedly tried to position this block in Asia, without success. The economic slowdown and the trade war between the United States and China are reportedly complicating the process.

Some sources quoted by WWD even suggest that the FMCG business could only be of interest to private equity funds. In parallel, Coty is also still trying to get rid of its 3.6% stake in Wella,.

The possible sale coincides with internal tensions. Sue Nabi, Coty's CEO since 2020, could leave the company this summer. Nabi, founder of Orveda and former L'Oréal executive, has led the group's strategic shift in recent years.

Her management, however, has been called into question after a series of failed operations. Among them, the purchase of 20% of Skkn by Kim, Kim Kardashian's brand, for $200 million. Coty charged a loss of $71 million after divesting its stake this year. Kylie Cosmetics, another of the group's bets, has also failed to meet expectations, although its fragrance line has performed well.

CEO Sue Nabi could leave the group this summer.

The situation is also complex on the stock market, with Coty's value plummeting. So far in 2025, the stock has lost 30.7%, compared to L'Oréal's 9.9% advance and Estée Lauder's more moderate 2.4% drop. Coty's current capitalization is around $4.13 billion. In its fiscal third quarter, revenue fell 6% to $1.29 billion, below forecasts.

A phased sale would avoid competition problems; a single buyer for all brands would generate regulatory friction, several experts have pointed out. And the uneven interest in Coty's assets makes splitting up the business the only possible way to maximize value.