Latest From Coty Inc.
Cosmetics regulatory reform efforts continued in 2019, which also saw Congress’s first cosmetics safety hearing since 2016. Meanwhile, the “clean” beauty movement gained momentum, fueled by the widely held perception that outdated regulations are allowing cosmetics consumers to be exposed to dangerous chemicals.
Coty is confident that it can build Kylie Cosmetics into a global powerhouse. However, some analysts have misgivings about the firm’s heavy investment in a celebrity brand, questioning whether its success could be a fad and noting Coty’s “poor track record” with acquisitions overall.
Leadership assured analysts on 6 November that Coty's Professional Beauty and Brazilian businesses are strong performers of high interest to potential acquirers, unlike Younique. Coty recently sold its majority stake in the social selling company back to its founders at a price that raised eyebrows.
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.
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