Coty Nabs Brazilian Beauty Biz, Unveils Pending Leadership Reorg
This article was originally published in The Rose Sheet
Heavyweight contender Coty continues to beef up, announcing deals to acquire Hypermarcas SA's Brazilian beauty business, including significant go-to-market infrastructure, and digital marketing firm Beamly. Slated to wrap up its merger with more than 40 P&G beauty brands next year, the firm also unfurls its pending leadership and organizational structure, which includes a new department, Growth and Digital.
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The world’s third-largest beauty company is changing direction following an acquisition tear in recent years, now exploring strategic options for its Professional hair care/salon and Brazilian businesses to reduce debt and sharpen its focus on Luxury and Consumer fragrance, makeup and skin care. The 21 October announcement has lifted Coty’s stock roughly 18%, though analyst takes are mixed.
CoverGirl, Max Factor and other pickups from P&G through the firms’ recently closed merger were “neglected” for two to three years as the deal was coming together and being executed, doing no favors for Coty’s newly combined Consumer Beauty business. However, Coty has dispensed with organizational work and is focused on driving growth, management says, projecting improvements in the back half of the year.
Rising beauty giant Coty projects a return to growth for its standalone business in the second half of fiscal 2017, but has yet to provide guidance for the combined entity that will emerge from its merger with P&G Specialty Beauty, expected to close in October. New CEO Camillo Pane will take the wheel at that time, and mass fragrance brands may be up for grabs as Coty works to streamline its glutted portfolio.