In contrast, prestige makeup category was negatively impacted by covid-19 related to the lockdowns in China in the earlier portion of the fiscal period. However, Coty said the category began to recover in the last quarter of the fiscal period. Coty credited the successful implementation of global price increases across all product categories, product premiumization strategy and positive overall market trends. Net revenues grew across all major geographic regions led by growth in the US and Brazil. Additionally, there was an increase in travel retail sales in all major regions due to increased leisure travel in the period. Net income nearly doubled to $508.2 million driven, in part, by the sale of Wella.

The gains continued into fiscal 2024, for the nine months ended March 31, as sales rose 13% to more than $4.7 billion. Gains were driven by a 17% increase in prestige sales and an 8% increase in consumer beauty sales.

In May, Coty signed a long-tem license agreement with Lena Gercke to develop, produce and distribute LeGer fragrance, which will launch in Germany, Austria and Switzerland this summer. Gercke is a German TV presenter and model who is CEO and founder of LeGer by Lena Gercke.

Multifunctionality continues to drive new product developments. Last month, CoverGirl rolled out TruBlend Skin Enhancer Primers & Luminizers. The six new skin care-infused products promise to treat and prep skin for an enhanced complexion.

“In recent years, CoverGirl has really focused on incorporating skin care ingredients into our color cosmetics to satisfy growing consumer interest in multitasking products,” said Mary Santangelo, senior vice president, CoverGirl global marketing, Coty.

Sales: $5.3 billion

Kylie Jenner’s eponymous cosmetics line is a member of the Coty family.

Coty is on the mend. Sales jumped 15% in fiscal 2022, helped by a 20% increase in prestige sales and a 7% gain in consumer beauty sales. Prestige gains came, in part, from an 18% gain in unit volume. Coty credited the increase to launches of Gucci Flora, Burberry Hero, Tiffany Rose Gold, CK Defy, Hugo Boss The Scent and the global relaunch of Kylie cosmetics. Existing brands that provided a sales lift included Gucci Makeup, Gucci Guilty, Burberry Her, Gucci Bloom, Chloe Atelier des Fleurs and Marc Jacobs Perfect.

Consumer gains came, in part, from a 5% increase in unit volume, especially within the color cosmetics sector. In fact color cosmetics sales are soaring. (To learn more about this space, turn to p. 44 in this issue.) The rebound continued into 2023. For the nine months ended March 31, 2023, sales rose 2%, but the company notes that fiscal Q3 sales were up 9%.

“Nine months into FY23, we are continuing to deliver sales growth amongst the best in our peer set, strong profit growth and operating margin expansion, and solid free cash flow as we progress towards our leverage target towards 3x exiting CY23,” said CEO Sue Y Nabi. “I am excited by the many initiatives planned for the coming quarters and years, as we continue on our journey to transform Coty into a true beauty powerhouse.”

In April, Coty launched Where My Heart Beats, a fragrance that includes LanzaTech’s CarbonSmart alcohol, which captures industrial transmissions and transforms it into alcohol for  use in fine fragrance.

“Coty is the first company to introduce carbon-captured alcohol into fine fragrances for global distribution,” said Coty Chief Scientific & Sustainability Officer Dr. Shimei Fan. “This is an inspiring example for sustainability being the ultimate driver of innovation. Beyond the science, there is something magical in upcycling industrial emissions into alcohol pure enough for use in fine fragrances.”

In May, the company unveiled something called “Coty Protopia,” which is billed as a new approach to develop innovative beauty products, underpinned by a commitment to sustainability and new art.

The Protobia announcement came as Coty launched an Orveda skin care serum and Infiniment Coty fragrance.

“Orveda’s new Omnipotent Concentrate serum… is, perhaps, the most potent serum of all time,” said Nabi. “Infiniment Coty Paris, our most ambitious fragrance project to date, aims to usher in a new era for fragrances and perfumery, representing to fragrance what Orveda is to skin care.”

Sales: $4.6 billion

Sales fell less than 2% last year, after plunging nearly 25% in fiscal 2020. The decline in fiscal 2021 was blamed primarily on the pandemic, with the greatest impact on mass market color cosmetics sales. In addition, prestige products in travel retail channels remained significantly impacted due to continued restrictions on leisure travel. But Coty noted that the decrease in demand throughout most of fiscal 2021 was partially offset by the reopening of stores and reduced covid-19 restrictions in Q4, which provided a lift for prestige channel sales. In addition, stronger sales were attributed to a repositioning and reinvestment in mass beauty brands, e-commerce growth and expansion in China. Coty executives also pointed to several successful fragrance launches such as Marc Jacobs Perfect, Gucci Guilty and Gucci Bloom.

By segment, fragrances accounted for 57.4% of sales, followed by color cosmetics (29.3%), and body care and other (13.3%). By region, sales in the Americas rose 5% to more than $1.8 billion. Coty attributed the gain, in part, to the fragrance introductions mentioned here, as well as new brand position and increased support for CoverGirl.

Sales in EMEA fell 5% to nearly $2.2 billion. The decline was blamed on reduced customer traffic in retail malls and travel restrictions.

Kim Kardashian’s new SKKN by Kim is a skin care collection launched with Coty.

Asia Pacific sales slipped 1% to $579 million. The primary culprit, again, was travel restrictions, which hit prestige channels particularly hard across the region.

In 2019, Coty embarked on two-year restructuring program that may finally be bearing fruit. For the nine months ended March 31, sales increased 16% to more than $4.1 billion. Sales were driven by like-for-like increases of 22% in prestige and 8% in consumer beauty.

According to CEO Sue Y. Nabi, Coty is benefiting from several category and market tailwinds led by fragrances. But at the same time, the company has faced lockdowns in China, war in Ukraine, inflationary headwinds, and global supply pressures.

“What is clear is that Coty has navigated this complex backdrop very successfully thus far,” concluded Nabi. “We have continued the premiumization of our portfolios in both prestige and consumer beauty, to implement price increases as a means of retaining talent and protecting margins, while also maintaining the necessary flexibility in our supply chain.”

Last month, Kim Kardashian launched SKKN by Kim, a line of “high-performance” skin care in partnership with Coty. The nine-item line includes cleanser, toner, exfoliator, different serums, face cream, eye cream, oil drops and night cream. Prices range from $43 to $95, and every product is available for refill.

Sales: $4.7 billion

Sales fell 25% for the year ended June 30, 2021. The company blamed the pandemic, pointing to a 60% decline in continuing operations. In an effort to lower Coty’s leverage and strengthen its balance sheet, in the midst of the pandemic Coty secured a $1 billion direct investment from KKR and entered into an agreement to sell 60% of Wella for $2.5 billion. Also in June, the company hired Sue Y. Nabi, a long-time beauty industry executive.

“We firmly believe she has the ideal prerequisites to become CEO of Coty,” said Executive Chairman Peter Harf. “I am even more convinced the new Coty today is set up for strategic optionality and has more potential than ever before to unlock and create value.”

Not long after that announcement, Coty said it will sell many of its manufacturing facilities and outsource production in an effort to become “asset light,” in the words of Harf. In fiscal 2020, Coty manufactured nearly 80% of its products at facilities in countries including the US, Brazil and China.

“Cosmetics is a complex business, so if we play it like Estée Lauder or L’Oréal, we are dead,” he told reporters.

Not dead, but certainly not healthy. In FY20, sales in Europe, Middle East and Africa, fell nearly 21% to $2.3 billion. Results in The Americas fell 21.3% to nearly $1.8 billion and sales in Asia-Pacific fell 24.4% to $582 million.

By region, EMEA accounted for 49% of sales, followed by the Americas (38%) and Asia-Pacific (12%). Coty did slash net losses by more than two-thirds to “just” $1.0 billion, after posting a net loss of nearly $3.8 billion in fiscal 2019.

Coty also slashed a portion of its hair care business, agreeing to sell 60% of Wella, Clairol, OPI and ghd brands to KKR. At the time of the transaction, the business was valued at $4.3 billion and had sales of $2.02 billion.

In fiscal 2021, Coty continued to strategize a recovery. In fiscal Q3, ended March 31, 2021, sales fell 3% to just over $1 billion. For the nine months, sales fell 14.2% to about $3.5 billion.

“Our Q3 marked another strong milestone in our journey to rejuvenate Coty’s position as a global beauty powerhouse,” said CEO Sue Nabi. “In less than a year, the leadership team and the broader organization have successfully mapped out our strategy, activated our brand and category plans, while generating operational improvements, and strengthening our financial position.”

For the nine months, sales fell 14% to $3.5 billion. Fragrance accounted for 59.1% of sales, followed by color cosmetics, 27.9% and body care and others, 13.0%.

In a move intended to revitalize CoverGirl, Coty is reducing the cosmetics brand’s SKUs to focus on clean beauty. At the same time, Coty is rolling out SKKN, Kim Kardashian’s skin care line.

In June, Coty won a record six awards from The Fragrance Foundation. Here are some more numbers that matter: Coty is the No. 1 player in the global fragrance market and No. 2 in color cosmetics.

To stay there, yet keep moving forward, the company has a six-point plan to accelerate sales and profit growth:

• Stabilize consumer beauty makeup brands and mass fragrances;
• Accelerate luxury fragrances and establish Coty as a key player in prestige makeup;
• Build a skin care portfolio across prestige and mass channels;
• Enhance e-commerce and direct-to-consumer (DTC) capabilities;
• Expand in China through prestige and select consumer beauty brands; and
• Establish Coty as an industry leader in sustainability.

In fiscal Q3, the company signed a letter of intent to partner with LanzaTech to introduce sustainable ethanol made from captured-carbon emissions into its fragrance products.

Sales: $8.6 billion

Coty, Kylie and KKR have been in the news for months as the world’s biggest fragrance company sold off some assets and bought others in attempt to reinvigorate its portfolio, which has taken a beating since Coty spent billions to buy battered P&G brands a few years ago. To reinvigorate its portfolio and attract a younger audience, in December Coty acquired controlling interest in Kylie Cosmetics, which was founded in 2017 by Kylie Jenner. The $600 million deal came together not long after Forbes called Jenner the youngest billionaire in the US. More recently, however, its come to light that Kylie Cosmetics’ actual sales aren’t nearly what analysts estimated (see Kylie No. 44).

Still, the questionable numbers weren’t enough to deter Coty from seeking a deal with Kylie’s older sister, Kim Kardashian West. In fact, in a conference call with analysts, CEO Peter Harf said he’s ”good friends” with the family’s business manager, Kris Jenner, who is also Kardashian West’s and Kylie Jenner’s mother.

“I’m very proud that the Jenner family is working with us and have access to them and to other people who are big opinion leaders on social media,” he said in a conference call with analysts.

According to Coty, Kylie Jenner has more than 270 million social media followers—many of them of the Gen Z generation.

Also last month, the company entered into a strategic transaction with KKR for Coty’s professional and retail hair business, including the Wella, Clairol, OPI and ghd brands, valuing the businesses at $4.3 billion on a cash- and debt-free basis. KKR will own 60% of this separately managed entity and Coty will own the remaining 40%. As previously announced, KKR is investing $1 billion directly into Coty through the issuance of convertible preferred shares.

The sale of a majority interest in the professional and retail hair business simplifies Coty’s portfolio and will allow Coty to focus on its core prestige and mass beauty businesses:
Prestige—Coty will reinforce its leadership positions through innovation in fragrances and adjacent categories, a focus on the premium end of its portfolio, and the e-commerce development of the Prestige Beauty franchise, which encompasses iconic brands, such as Calvin Klein, Hugo Boss, Burberry and Gucci, as well as Kylie Beauty.

Mass beauty—Coty will reinvest in its brands in priority markets to improve fundamentals and expand its omni-channel presence. Brands include Sally Hansen, Rimmel, CoverGirl and Max Factor.
Cost leadership—Excluding Wella business, Coty is targeting a net reduction in fixed costs of approximately $600 million in cash over the next three years. The one-off costs associated with this program are estimated at $500 million.

The moves come after a tough two years for Coty. For the nine months ended March 31, 2020, Coty’s sales fell 11% to $5.8 billion. In Q3, sales fell more than 23%, which sales in Asia Pacific falling 34.8%; the Americas declining 18.8% and professional beauty falling nearly 12%.

Sales: $9.3 billion.

Coty bit off more than it could chew last year and the $12.5 billion acquisition of dozens of P&G beauty brands has left a bad taste in investors’ mouths. No wonder the company will unveil its turnaround plan this month. Prior to that, last year Coty divested or terminated 14 brands including CLC, Celine Dion, Cutex, Esprit, Guess, Halle Berry, JLo, Lady Gaga, Love2Love, Playboy, Summer and Tim McGraw within consumer beauty, and Cerruti and Chopard, which were reported in the luxury segment.

Fiscal 2018 sales rose 23% last year, primarily due to acquisitions. Luxury segment sales rose 25% thanks to successful fragrance launches like Obsessed by Calvin Klein and good gains in China and the Middle East. Consumer beauty segment sales increased 16% as a result of the acquisitions of P&G beauty and ghd. Professional beauty sales surged 38% due to the impact of acquisitions and the successful launch of products like OPI ProHealth GelColor System and WellaPlex.

By region, North America sales increased 18% to nearly $3 billion; sales in Europe rose 26% to $4.2 billion and ALMEA sales were up 23% to $2.2 billion.

Coty’s got problems, but that didn’t stop JAB Holding Company from boosting its stake in the beleaguered cosmetic maker. In April, JAB regained majority control of the company when it increased its stake to 60%, up from 40%. JAB, which also owns Keurig, Dr. Pepper and Pret A Manger, is determined to lift Coty’s sagging fortunes. It’s still got a ways to go.Through nine months, sales fell nearly 9% to $6.5 billion. The luxury products division reported a 3% increase in sales, but that was more than offset by a 5% decline in professional product sales and an 18% plunge in consumer beauty sales.
Still, CEO Pierre Laubies remained upbeat, noting that Q3 supply issues have been resolved and a new management team has coalesced and is in place. Of course, he also noted that the consumer beauty division’s woes must be addressed, specifically, shelf productivity, product range simplification and brand investment at scale.

“These are the main priorities of the strategic plan that we are completing and which we will start deploying as soon as fiscal 2020,” he explained.

In February, Coty hired Gianni Pieraccioni as its chief operating officer, consumer beauty. He had been president, Revlon Consumer Division and served as COO of Revlon Inc. until 2017. He brings more than 30 years of international business experience with consumer goods companies including J&J, PepsiCo and P&G.

Also, Pierre-André Terisse joined the company as chief financial officer. Terisse spent the majority of his career at Danone, most notably as group CFO of Danone for seven years.

In May, Fiona Hughes joined Coty as chief marketing officer, Coty Consumer Beauty. Prior to this appointment, she served as CMO at Jacobs Douwe Egberts.

Sales: $7.6 billion.

Multibillion-dollar acquisitions can paper over weak results. Coty’s sales soared 76% last year, thanks to the addition of several leading brands that were acquired from P&G in 2016 for $12 billion; but without that tremendous boost, sales rose just 1%. Worse, when you exclude the contributions of recent acquisitions such as ghd and Younique, organic sales fell 5%. But let’s focus on the positive, shall we? That would be professional beauty, which benefitted from gains at Wella and System Professional. In fact, professional beauty sales jumped from $250 million to nearly $1.4 billion. But those gains were hampered by declines at OPI.

Consumer beauty sales jumped 63% to nearly $3.7 billion due to the P&G acquisition, but the company reported weakness in several of the acquired brands, including CoverGirl, Clairol and Wella retail. Luxury sales increased 40% to more than $2.5 billion; declining sales of Calvin Klein and Marc Jacobs were primarily offset by growth in Hugo Boss, Philosophy and Chloe, according to the company.

By region, North America sales increased 77%, but fell 2% on a constant basis, due to declines in the US, particularly, the consumer beauty division. European sales rose 73%, but were flat on a constant basis. And finally, sales in Australia, Latin America, Middle East and Africa (ALMEA), rose 80%, including a 6% gain on a constant basis, as the business reported positive organic growth in Brazil, the Middle East and Australia, as well as seven months of contributions from Hypermarcas.

In a key personnel move, in September, Daniel Ramos was appointed chief scientific officer and EVP-R&D. Prior to that, Ramos held similar positions at Revlon. He replaced Ralph Macchio who retired.

For the nine months ended March 31, 2018, Coty’s revenue rose more than 31% to nearly $7.1 billion. According to Camillo Pane, CEO, Coty’s Luxury division continued to deliver very strong results, and the Professional Beauty division once again demonstrated consistent solid growth. While the Consumer Beauty division continued its uneven performance, Coty said there were encouraging signs of stability.

“Though there is still much work to be done, including the continued integration of the P&G Beauty business, I am encouraged by how far we have come since embarking on our journey to transform Coty into a challenger in the global beauty industry,” Pane said in a statement. “As we have said, recovery will not be a straight line, but we continue to aim to deliver modest organic net revenue growth for the second half of the year.”

Perhaps some of that real growth will be through virtual channels. Through the first half of 2018, Coty has made several introductions within the tech space. It all started back in January, when Coty debuted Let’s Get Ready, a new skill set for the Amazon Echo Show. Let’s Get Ready brings on-demand, occasion-based look planning fine-tuned by personal attributes such as hair, eye and skin color.

“Digital innovation with a focus on voice and virtual assistants is a key part of our digital strategy as we aim to bring consumers frictionless beauty experiences,” explained Jason Forbes, chief digital and media officer at Coty. “We’re thrilled to be leading the market with the introduction of a visual beauty skill in the UK, inspiring consumers to both hear and see new beauty looks as well as step-by-step tutorials. Further, this skill allows us to deliver an authentic and personalized experience for beauty enthusiasts that happens near real time, delivering customized looks in the context of a person’s lifestyle and personal attributes.”

For example, the new Magic Mirror integrates physical products with digital content, which Coty says makes for first-of-a-kind augmented reality (AR) makeup try-on experience. When a shopper picks up a lipstick from the display, the selected color instantly appears on her lips in the mirror. Coty contends this new development removes barriers of traditional virtual makeup experiences, where shoppers can only engage with products in a virtual setting. Putting the physical product in shoppers’ hands has been found to increase attitudes and purchase intentions of the product, propelling a more seamless path to purchase.

According to Coty, 72% of consumers surveyed said they want an in-store beauty experience to be a mixture of both physical and digital elements in order to make it feel more “real” and “believable.” At the same time, virtual product try-on solves the issue of testers not always being available, hygiene concerns and shoppers’ lips becoming stained after only a few lipstick try-ons.

“As part of our desire to reinvent the retail experience through purposeful and personalized innovation, the Bourjois Magic Mirror represents the most extensive integration of physical products and digital content in the beauty industry,” said Elodie Levy, Coty’s global digital innovation senior director.  “Most women intuitively prefer to play with a lipstick rather than touch a screen, as there is an inherent sensual aspect in cosmetics packaging that no technology can replace, and our new Magic Mirror provides this desired experience to shoppers.”

In April, Esra Erkal-Paler was appointed chief global corporate affairs officer and a member of the executive committee, a newly-created position. She will lead Coty’s global internal and external communications strategies and responsible growth. Prior to this appointment, Erkal-Paler was global head of external communications, AstraZeneca.

In May, Coty Professional Beauty opened new headquarters in Calabasas, CA. The facility features two separate centers: the general office, which is an open collaboration space where Coty teams including marketing, consumer research and finance sit alongside one another; and the studio annex, where Coty educators and ambassadors experiment and train salon professionals in the latest techniques and trends. Natural light pours into the space, making for an ideal environment to create through hair color, cuts and styling techniques or bespoke nail art and design. A dedicated photo stage gives space to the content team to capture work for online tutorials or for professionals’ personal portfolios.

Sales: $4.3 billion.

Coty is just beginning to realize the gains from its $12 billion purchase of well-known P&G brands, a deal that was announced two years ago and only completed late last year. The move made Coty the No. 1 player in fragrance, the No. 3 player in color cosmetics, and No. 2 in professional hair care. When it is all accounted for by the end of fiscal 2017, Coty will zoom up our ranking with sales of about $9.2 billion. It will also make Coty the world’s No. 3 pure-play beauty company, behind L’Oréal and Estée Lauder.

With the acquisition completed, Coty management is focused on five areas:

• Leverage the strength and scale of the combined company to create a new global leader and challenger in the beauty industry;
• Expand in an attractive new category, through the addition of the hair color and styling business;
• Combine new organic growth opportunities with a well-targeted acquisition strategy;
• Drive improvements in margin, profit and free cash flow, providing financial flexibility;
• Capitalize on strong, well-aligned and balanced leadership, led by new CEO Camillo Pane.

By category, fragrance accounted for 46% of sales last year, followed by color cosmetics (36%) and skin and body care (16%). The purchase of Hypermarcas added 2% to sales last year. Coty’s top 10 brands represent 70% of sales last year; they include Adidas, Calvin Klein, Chloé, Davidoff, Marc Jacobs, OPI, Philosophy, Playboy, Rimmel and Sally Hansen—but all that will change when heavyweight names like CoverGirl, Max Factor, Clairol and Wella are included for the full year.

All of these changes come as Coty’s existing businesses went flat in fiscal 2016. Sales declined 1% as skin and body care sales fell 10% to $693 million. Every brand in the skin care portfolio reported a decline in sales, as Forex was responsible for a 6% decline, unit volume fell 3% and price/mix accounted for 1% of the fall.

Meanwhile, fragrance sales dropped 8% to just over $2 billion. Forex accounted for 5% of the skin care decline with unit volume declining 4%. That was partially offset by a positive price and mix impact of 1%. Coty said celebrity and lifestyle brands can’t hold an audience like they did in the past, although the Marc Jacobs franchise continues to make gains.

The color cosmetics group bucked the trend, as sales rose 7% to over $1.5 billion. Positive price and mix added 12% and unit volume increased 1%, but they were partially offset by Forex (-6%). Coty said sales of OPI, NYC New York Color and Astor all fell, while Sally Hansen remained a bright spot. Sales of Rimmel were flat.

Last year Sylive Moreau joined Coty as president, professional beauty. She had been with P&G where she oversaw the salon professional business.

The third quarter ended March 31, 2017; Coty seemed to be making progress as it digests the P&G purchase. Sales rose 5% to more than $2 billion, which beat analysts’ forecasts. However, the company reported a net loss of $164 million after taking a $213 million restructuring charge. Coty insists it will reap $750 million in synergy savings.
“This improvement was driven by good growth performance in the Luxury division, flat performance in professional beauty, and some improvement but continued negative performance in the consumer beauty division,” explained Coty CEO Camillo Pane. “It is clear that fiscal 2017 is a transitional year and the path to recovery will take some time and will not be a straight line.”

Sales: $4.3 billion for the year ended June 30, 2015.

Key Personnel: Bart Becht, chairman and interim chief executive officer; Patrice de Talhouët, executive vice president and chief The $12.5 billion megadeal with Procter & Gamble won’t be completed until the fall, but when the sale goes through, it will transform Coty into one of the world’s largest beauty companies, with annual sales of more than $9 billion. Coty is expected to become the global leader in fragrances with market leading positions in color cosmetics and hair coloring and styling. But it’s not all about brands, products and category expansion; the purchase also significantly expands Coty’s global footprint, enabling the company to get bigger in critical countries like Brazil and Japan; as well as providing a lift in North America, Europe, the Middle East and Asia.

In 2015, the company relied on its 10 powerbrands, which accounted for 72% of sales. Fragrance accounted for 50% of sales, followed by color cosmetics (33%) and skin and body care (17%).

Fragrance sales declined 6% in fiscal 2015 to about $2.2 billion, as negative price and mix and Forex woes were only partially offset by a 4% increase in unit volume. The company noted that launch activity was lower following a brisk 2014 schedule. Couple that with celebrity scents getting long in the tooth and a general deterioration of the European fragrance market, and it’s no wonder why fragrance sales fell last year.

Skin care results were even worse, as sales fell 10% to about $772 million, due to lower sales of Adidas and Playboy products and the discontinuation of TJoy and China Optimization.

Color cosmetics were a bright spot, however, as sales rose 6% to $1.4 billion. The Bourjois acquisition provided a 4% lift in volume and value, but existing brands Sally Hansen and Rimmel also posted good gains, according to Coty. Partially offsetting these results were lower sales of OPI and Nicole by OPI.

By region, sales in the Americas fell less than 1% to about $1.7 billion as Brazilian results provided a lift after Coty inked a distribution deal with Avon in that country. In the US, demand for Sally Hansen, Rimmel and Marc Jacobs were offset by lower net revenues from OPI.

Sales: $4.5 billion, for the year ended June 30, 2014.

Fragrances—Katy Perry Killer Queen, Ultrasense White by Jil Sander, Marc Jacobs Mod Noir, Philosophy Live Joyously, Reveal Calvin Klein, Daisy Marc Jacobs Sorbet, Roberto Cavali Oud al Qasr, Jeremy Scott for Adidas, Bottega Veneta pour home Extrême, Daisy Dream, Vespa for Her and for Him; Color Cosmetics—Sally Hansen Miracle Gel Top Coat and Insta-Dri nail colors, OPI Aloha Hawaii Collection, Bourjois color cosmetics (acquisition); Skin Care—Philosophy Renewed Hope in a Jar. To be launched: Marc Jacobs Decadence fragrance (October).

Comments: As this issue went to press, the industry was waiting for the official word that Coty was the big winner in the Procter & Gamble Sell-Off Sweepstakes. Although neither party would confirm it at press time, Coty reportedly agreed to pay $12 billion for Max Factor, Cover Girl and Wella.

There was other news coming from Coty’s corporate office as this issue went to press; Elio Leoni Sceti, who had been ready to take over as CEO, decided to not take on the role he was scheduled to start in July. Sceti was hired in April to replace Michele Scannavini who resigned in September for personal reasons.

Bart Becht—who is now interim CEO as well as chairman—has been steering Coty through an efficiency program in an effort to improve the bottom line. But these things take time. Through nine months March 31, 2015, sales fell 4% to $3.3 billion. But Becht seems undeterred, noting that Q3 was just the second quarter of Coty’s new strategy.

“We have made excellent progress in driving profit growth behind efficiency programs, as shown by the 24% growth in Q3 adjusted operating profits,” Becht enthused. “As our success in this area is very good, we will be looking to increase the $200 million target for our Global Efficiency Plan.”

In fiscal 2014, sales fell 2% to $4.5 billion. Unit volume fell 3%, but was partially offset by positive price and mix. At the end of the fiscal year, Coty eliminated the TJoy brand and the reorganized its mass business in China. New launches represented 15% of net revenue during the year. The contribution from new launches was partially offset by an approximate 16% decline in net revenues from existing products that are later in their life cycles.

Coty calls itself the No. 2 player in the global fragrance market and fragrances accounted for 55% of sales, followed by color cosmetics (30%) and skin care (15%).

In fiscal 2014, Coty manufactured 75% of its fragrances, with Europe, Middle East and Africa accounting for 54% of sales, followed by the Americas (30%) and Asia Pacific (16%). Top fragrance brands by percentage of net revenues are Calvin Klein, Marc Jacobs, Davidoff, Playboy and Chloé.

Coty says it is the No. 2 player in the global nail care segment and “emerging leader” in color cosmetics, ranking No. 5 globally and No. 3 in the North American and European mass market. Its top color cosmetics brands are Rimmel, Sally Hansen and OPI.
On April 1, Coty closed the Bourjois acquisition, noting that the firm’s strength in key European color cosmetics markets is complementary to Coty’s existing color portfolio.

Skin and body care sales, where Coty has three main brands (Adidas, Lancaster and Philosophy), were essentially flat.
By region, Europe, the Middle East and Africa accounted for 50% of sales last year, followed by the Americas (38%) and Asia Pacific (12%). Sales in the Americas fell 11% due to a decline in sales of Sally Hansen, OPI and fragrances, particularly older fragrances like Playboy, Chloé, Calvin Klein and Davidoff.

EMEA results were better, as sales increased 5%, driven by gains in the UK, Eastern Europe and the Middle East. During the year, Coty formed a joint venture in the UAE and established a South African subsidiary, which is part of the company plan to expand into emerging markets. Better UK sales reflected incremental net revenues from OPI resulting from the acquisition of a UK distributor and from Katy Perry Killer Queen as well as growth from David Beckham and Rimmel.

Sales in Asia Pacific fell less than 1%, but Coty noted that excluding the impact of reorganization of its China business and foreign currency exchange translations, net revenues in increased 7%.

Sales: $4.6 billion. Net income: $201 million, for the year ended June 30, 2013.

Sales were up just 1% last year. Growth in color cosmetics and fragrances was partially offset by a decline in skin and body care sales.

By segment, fragrances accounted for 54% of sales; followed by color cosmetics (31%) and skin and body care (15%). Europe, Middle East and Asia represented 47% of sales, trailed by the Americas (41%) and Asia-Pacific (12%).

Coty calls itself the No. 1 player in the global fragrance market and No. 6 in the color cosmetics market. Fragrance sales increased 2% on an 8% gain in unit volume, offset by negative price and mix (-5%) and currency exchange (-1%). Segment growth was primarily driven by net revenues from newly-established brand Lady Gaga Fame, the growing popularity of the Roberto Cavalli franchise and the successful new launches of DOT Marc Jacobs, See by Chloé and Playboy VIP.

Color cosmetics sales increased 3% to more than $1.4 billion on a 4% gain in unit volume that the company attributed to Rimmel. The gain, which was partially offset by foreign currency exchange, was attributed to new product introductions as well as expanded distribution in the US, France and Australia. Growth in N.Y.C. New York Color and Manhattan also contributed to the increase in the color cosmetics segment. OPI sales were flat, as gains in Europe and travel retail were offset by declines in the US.

Skin and body care sales fell 5% to about $690 million, on a 5% volume decline and a 1% decline due to foreign currency exchange translations that were partially offset by a positive price and mix impact of 1%, according to the company.

For the nine months ended March 31, 2014, sales fell 2% to $3.5 billion. Fragrance sales were flat at $2.0 billion, color cosmetics sales fell 9% to $990 million, and skin and body care sales rose 2% to $515 million. By region, sales in the Americas fell 12% to $1.3 billion, but sales in Europe, Middle East and Africa improved 5% to more than $1.7 billion and sales in Asia Pacific were up 3% to $428 million. Coty’s third quarter net revenues rose 2% to $1.0 billion. Fragrance sales rose 6%, thanks to sales of Calvin Klein, Davidoff, Marc Jacobs and Playboy, which Coty calls its power brands.

“Coty returned to revenues growth in the third quarter. The majority of our power brands showed positive development thanks to a competitive innovation program, and growth in the emerging markets accelerated to 15%,” said Michele Scannavini, CEO. “Both prove our strategic focus on these brands and geographies is starting to bear fruit. While market conditions remain challenging in some product segments in parts of the world, we are sticking to our current strategy and targeting for continued growth for the remainder of the calendar year while working to significantly improve the cost profile of the business.”

In May, Coty announced that select fragrances will be marketed and sold through Avon Brazil’s network of 1.5 million independent sales representatives. The deal brings together Avon’s extensive network of representatives in Brazil and Coty’s portfolio of celebrity and lifestyle fragrance brands in an effort to increase both companies’ global fragrance market share, consumer loyalty and brand appeal in Brazil.

“This commercial partnership allows Coty to expand its geographical reach and strengthen our footprint in the emerging markets, with Brazil being a key driver in our growth strategy,” said Renato Semerari, president, Coty Beauty. “Avon’s extensive experience in Brazil makes the company an ideal partner, and we look forward to working together.”

With that move, speculators wondered if Coty would put in another bid for Avon. Coty had made bids for Avon in the past, only to be rebuffed by the direct seller’s management.

Sales: $4.6 billion. Net loss: $324 million for the year ended June 30, 2012.

It’s been a month since Coty went public with its $1 billion initial public offering, but the company’s timing was a little off. Less than a week after the Coty IPO, the Fed signaled that it would begin reducing its monetary stimulus program. That announcement sent most stocks down, Coty included. At press time, Coty’s share price was trading at $17.27, slightly below its $17.50 IPO price.

Stifel Nicolaus initiated coverage of the stock with a Hold rating. Analyst Mark Astrachan notes that the company should benefit from a strong cash flow and good management team, but that’s not enough to overcome Coty’s modest sales growth relative to its peers. He sees low single-digit organic sales growth, modestly below the global beauty market, with strength in fragrances and cosmetics offset by weakness in its skin care products.

“We believe Coty will increasingly be viewed as a cash generation and allocation story, estimating $429 million and $524 million in free cash flow generation in FY14 and FY15, respectively,” he told investores. “We believe that barring a large acquisition, which is unlikely, Coty is likely to make smaller, bolt-on acquisitions and/or increasingly return cash to shareholders, including by increasing its expected $0.15 per share dividend, current yield of 0.9%.”

Despite the disappointing Wall Street debut, Coty leadership remains positive. In an interview with CNBC’s “Squawk on the Street,” company CEO Michele Scannavini noted that Coty’s single-minded objective is to “keep growing in line or faster than the market where we compete, in terms of revenues and in terms of bottom line as well. I’m very optimistic about the future.”

For the year ended June 30, 2012, Coty’s sales rose 13%, but reported a net loss of $324 million, after posting net income of nearly $62 million in fiscal 2011. Coty’s color cosmetics business recorded an operating loss of more than $577 million and its skin and body care unit’s operating loss exceeded $172 million.

Fragrance represented more than 50% of Coty’s turnover in 2012, and sales rose 5% a year ago. Color cosmetics sales improved less than 3% to more than $1.4 billion, but skin care sales jumped more than 17% to nearly $728 million.

By region, sales in the Americas rose about 2% to nearly $1.9 billion. Sales in Europe, Middle East and Africa rose 4% to more than $2.2 billion and Asia Pacific sales surged 19% to nearly $519 million.

At the 2013 Fragrance Foundation Awards, Coty took home three awards, including: Fragrance of the Year: Luxury Women’s—Florabotanica Balenciaga Paris; Fragrance of the Year: Prestige Women’s—DOT Marc Jacobs and Best Packaging of the Year Women’s—Florabotanica Balenciaga Paris.

Last month, Coty announced two promotions. Stephen Mormoris is SVP, global marketing American fragrances, Coty Prestige and Johanna Businelli has been promoted to the newly created role of SVP, Color Cosmetics, Coty Beauty.

In his new position Mormoris will build on brands such as Calvin Klein, Marc Jacobs and Balenciaga, as well as develop new luxury fashion/lifestyle brands that consolidate Coty’s fragrance leadership in the world. He will also retain responsibility for scouting new partnerships in the fragrance arena as well as overviewing some strategic relationships with existing partners.s will report to Jean Mortier, president, Coty Prestige.

Businelli’s role marks the first time Coty has had a senior marketing position fully dedicated to color cosmetics, which has become the second-largest and fastest-growing segment in Coty. Businelli has developed an extensive expertise in color focusing on the category throughout her career.

Sales: $4.1 billion.

Coty came calling, but the Avon Lady refused to come to the door. After Avon’s board outright rejecting an unsolicited $10 billion bid in April, Coty execs upped the ante to $10.7 billion. Less than a month later, Coty withdrew its second bid. In a letter to the Avon board, Coty said it was moving on to pursue other opportunities. If Avon had given a credible reason of why it needed more time, Coty would have considered agreeing to it, people familiar with the matter said. But after reaching out to various parties on the Avon side and receiving no reply, Coty decided to stick to its original deadline.

“(Avon’s) lack of engagement with us leads us to believe that you remain reluctant to explore a friendly, negotiated combination on a reasonable timetable,” Coty chairman Bart Becht wrote in the letter to Avon. “Two months is enough….it is time for Coty Inc. to move on.”

For its part, Avon issued the following statement:

“Avon Products responded promptly to Coty’s May 9th letter by disclosing it on May 10th and indicating that its Board would consider the contents of the letter. Subsequently on May 13th, Avon’s Board said it would respond to Coty’s letter within one week after considering it in conjunction with management and financial and legal advisors. On May 14th, five days after sending its letter, Coty withdrew its proposal.”

With that, Becht returned to the drawing board to mull his next move, which could include bringing Coty public. Coty Inc. has tapped Bank of America Merrill Lynch and J.P. Morgan Chase as lead underwriters for an initial public offering, which is expected to be priced this summer or early fall, people familiar with the matter said.

Nearly everyone agrees that Coty will continue to look for acquisitions. But few of the names that have emerged, including Perricone MD and Urban Decay, have a presence in emerging markets—something that made Avon very attractive to Coty in the first place.

Becht became Coty’s chairman in November, after a lengthy and successful career at Reckitt Benckiser. Coty is majority owned by Joh. A. Benckiser, which is also the largest shareholder of Reckitt Benckiser Group PLC.

Sales: $3.8 billion (estimated) for the year ended June 30, 2010.

Fueled by the public’s fascination with all things celebrity, privately-held Coty continues to post double-digit sales gains year after year.

“Look around. Celebrities are becoming more and more important in cinema, in art, in fashion,” Coty CEO Bernd Beetz told Reuters. “It’s in the DNA of society.”

While stars such as Jennifer Lopez, Gwen Stefani and Lady Gaga may be consumers’ DNA, acquisitions can be the growth hormone that companies, and their backers, crave.

Late last year, Coty made several key acquisitions including OPI, a prestige nail care company; Philosophy, a premier skin care and cosmetics company; TJoy, a leading Chinese skin care company; and Dr. Scheller Cosmetics AG, manufacturer of some of Germany’s most popular makeup and skin care brands. Those moves grabbed the attention of industry outsiders and in January 2011, Berkshire Partners LLC, the Boston-based private equity firm, and Rhône, a private equity firm with offices in New York and London, made minority equity investments in Coty. Terms of the transactions were not disclosed.

“Coty is an established leader in the global fragrance, beauty and skin care industry, with an impressive collection and diversity of consumer brands,” said M. Steven Langman, managing director, Rhône. “Rhône is excited to be partnering with Coty, its management team and its shareholders in this transaction and to support Coty in the realization of its strategic plans.”

According to Beetz, the move puts Coty in a good position for more acquisitions.

“This mutually beneficial agreement allows Coty to continue its accelerated growth path organically and externally around the globe,” said Beetz. “By bringing these partners on board, Coty will be in a stronger position to prepare for future and larger acquisitions while maintaining the culture that makes Coty such a unique place in the beauty industry.”

With fiscal 2011 ending last month, Coty’s sales were expected to easily top $4 billion on the strength of its recent acquisitions and its growing portfolio of fragrance brands.

Sales: $3.5 billion for the year ended June 30, 2009.

Snow Bunnies is the newest incarnation of the successful Harajuku Lovers fragrance collection.

Every category in the beauty industry was hit hard by the recession, but fine fragrance was hit particularly hard. No wonder then that Coty’s sales plunged last year, falling from $4 billion in fiscal 2008.

By category, fragrance accounted for 59% of sales, followed by color cosmetics (22%) and skin, sun and personal care (19%).

While sales have tumbled, that hasn’t stopped Coty from rolling out new products. Since January 2009, Coty Inc. has launched more than a dozen new fragrance, skin care and color products to the market, and announced five new partnerships with well-known celebrities, designers and lifestyle brands.

Those partnerships have already yielded several new products with more on the way. For example, a deal struck with Beyoncé Knowles in September 2009 led to the introduction of Heat in early 2010 in North and South America with subsequent plans to launch in Europe and key markets throughout the world later this year. In other moves, Bottega Veneta and Coty formed an exclusive partnership to create, develop and distribute a line of fragrances, which will be Bottega Veneta’s first fragrance collection. Coty also entered into a license agreement with global lifestyle brand, Guess?, Inc. to develop and market new fragrance lines. As part of the new partnership, Coty is distributing existing Guess fragrances.

The Marc Jacobs franchise was expanded with the addition of Lola.

In other news, in March, Coty signed Alejandra Ramos, Solange Knowles and Zooey Deschanel as Rimmel ambassadors. The three will team up with Kate Moss, Georgia May Jagger and Coco Rocha as the “aspirational ambassadors” of Rimmel London.

Finally, in honor of the Coty-DKMS Linked Against Leukemia partnership, Coty helped to raise a record $1.8 million dollars to support the DKMS 4th Annual Gala held on April 29 at Cipriani 42nd Street in New York City. The money will help register more than 19,000 bone marrow donors and work to save lives worldwide. Coty is the sole corporate sponsor of DKMS Americas.

Sales: $4 billion for the year ended June 30, 2008.

Through astute acquisitions and licensing partnerships, Coty Inc. has achieved a leadership position in fragrance and has quickly emerged as a global leader in the world of beauty. Coty calls itself the world’s largest fragrance company, with sales rising 23% to $4 billion for the year ended June 30, 2008. Fragrances accounted for 65% of sales; followed by color cosmetics, 20%; toiletries, 12%; and skin care and sun care, 3%. Western Europe accounted for 54% of sales and the U.S., 32%.

Coty has research and development centers in New Jersey, Monaco and Spain, and this global pool of more than 100 experts has created a range of innovative beauty products. In fact, the company boasts more than 500 patent registrations worldwide.

However, it’s in fragrance where Coty shines brightest. In May, the company demonstrated once again that it is at the forefront of the U.S. fragrance industry when it took home six FiFi awards, including Women’s Luxe—Harajuku Lovers Fragrance: Love, Lil’Angel, Music, Baby, “G;” Men’s Popular Appeal—McGraw by Tim McGraw; Women’s Nouveau Niche—Chloé eau de parfum; Fragrance Hall of Fame—Davidoff Cool Water; Best Package of the Year, Women’s Prestige—Harajuku Lovers Fragrance: Love, Lil’Angel, Music, Baby, “G” and Best Package of the Year, Men’s Popular Appeal—McGraw by Tim McGraw.

In a key personnel move, Sergio Pedreiro joined Coty as chief financial officer in January. Prior to joining the company, Mr. Pedreiro had been chief financial officer at America Latina Logistica (ALL), Latin America’s largest independent logistics company. Most recently, in May, Renato Semerari was appointed president of the Coty Beauty division. He replaced Has Joachim Honigfort, who retired. Prior to this appointment, Mr. Semerari had been president and chief executive officer of Sephora Europe.

Finally, in December, Coty expanded its distribution agreement with Puig to include the Antonio Banderas fragrance lines in the U.S. Coty already distributed a number of prestige brands for Puig, including Prada, Nina Ricci, Carolina Herrera and Paco Rabanne.

Sales: $3.3 billion for the year ended June 30, 2007.

It’s been a busy 12 months for Coty, with acquisitions, divestures, and of course, new fragrance launches. It’s been a successful 12 months as well as sales jumped 14% last year. By category, fragrances accounted for 68% of sales, followed by color cosmetics (15%), toiletries (14%), and skin care and sun care (3%). By region, Europe accounted for 55% of sales, followed by Americas (33%), Asia (6%) and other (6%). Finally, Coty Prestige’s sales represented 55% of corporate sales, with Coty Beauty at 45%.

Earlier this year, Coty signed actress Eva Mendes as the face of Calvin Klein Fragrances. The new ad will debut this fall.

In May, Coty began distributing and manufacturing Rimmel cosmetics in China. Under terms of an agreement, Kosé Corp. is distributing the brand to department stores and drugstores.

“By commencing distribution in China, Coty is accelerating the global brand presence of Rimmel and simultaneously continuing the elevation of Coty’s global presence,” said Bernd Beetz, chief executive officer. “We look forward to bringing Rimmel products to China as we focus on accelerating our business growth in Asia.”

In April, Coty sold the Del Pharmaceuticals business to Church & Dwight for $380 million in cash. The transaction is expected to close this month. The Del unit had 2007 sales of $100 million. In December 2007, Coty acquired Del Laboratories Inc., which had sales of $380 million.

Also in April, Coty partnered with HSN and HSN.com to sell cosmetics and fragrances.

“Interactive retailing is an innovative endeavor that will deliver our Coty Prestige brands to consumers in a convenient and accessible new way,” explained Mr. Beetz. “At Coty we are always looking for the next big thing to build our portfolio and strengthen our business globally. HSN gives us a way to both meet our business goals and make the shopping experience as easy as possible for our consumers.”

In May, Coty was the big winner at the Fragrance Foundation FiFi awards, winning five FiFis, including women’s luxe fragrance of the year for Daisy Marc Jacobs.

This month, Gemini Cosmetics began distributing Coty Beauty’s Nautica Voyage and My Voyage, Baby Phat Fabulosity and Kate Moss brands in U.S. department and specialty stores. Gemini will also distribute the David and Victoria Beckham scents when they debut in September.

Finally, Coty has created Home Skin Lab, a skin care brand set to debut this fall. It will target women facing diverse skin problems and helps to support cell renewal cycle.

Inspired by Dr. Norman Pastorek, a New York-based facial plastic surgeon, and his wife Janice, a skin care expert, Home Skin Lab was developed to address women’s main skin concerns. The line will offer five different protocols: Ageless, against the first signs of aging; Wrinkl’ess, to reduce fine lines and wrinkles; Firmness, to “redensify” the skin; Brightness, to brighten dull complexions and Pureness, to fight oily skin issues.

The line will be launched simultaneously in the U.S. and in Europe starting in September. In the U.S. the brand will be available first on the Home Shopping Network. In Europe, Home Skin Lab will be launched in France, Spain, Italy, Portugal, Greece and Eastern Europe exclusively at Sephora, and in Germany, Austria and in the Netherlands at Douglas.

Following the Europe and U.S. launches, Home Skin Lab expansion will continue into Asia and the rest of the world with exclusive partnerships.