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Coty Launches Citi-Led Review of Mass Beauty and Brazil to Refocus on Fragrance

The process will weigh sales or spin-offs to bolster the balance sheet after weak mass-market results.

Overview

  • The review centers on Coty’s $1.2 billion mass color cosmetics portfolio — including CoverGirl, Rimmel, Sally Hansen and Max Factor — and its $400 million Brazil business.
  • Citi has been engaged to evaluate options including partnerships, divestitures, spin-offs and other strategic actions.
  • Gordon von Bretten was appointed president of consumer beauty to lead the review, while Stefano Curti and Alexis Vaganay will depart their consumer beauty roles.
  • Coty is combining mass and prestige fragrance under one unit that the company says now represents 69% of sales.
  • Recent pressures include retailer destocking and online competition, with Coty reporting a fourth-quarter net loss of $72.1 million on $1.25 billion in revenue and shares up 0.8% to $4.04 as analysts question the availability of buyers.