Coty Prepared For Possibility That COVID-19 Revenue Recovery Could Be Years Away
The beauty giant says it is selling its Professional Beauty and retail hair-care businesses to global investment firm KKR and targeting $700m in cost reductions over the next two and a half years. Coty already was in transformation mode prior to COVID-19, which drove a 23% decline in its third-quarter net sales, and it does not expect revenue levels to normalize anytime soon.
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Analysts believe Henkel is a top contender to acquire Coty’s professional hair-care business, which ranks second in the world after L’Oreal’s, with Henkel’s a distant third. According to Kline’s Carrie Mellage, the DevaCurl deal shows the German firm’s enduring appetite for M&A following a series of similarly small, US-focused purchases in recent years that could be leading to something much larger.