Jamie Matusow, Editor10.01.14
Update: Coty ranks at #13 on our latest report Top 20 Global Beauty Companies 2021.
New York, NY
www.coty.com
Beauty Sales: $4.6 billion
Key Personnel: Michele Scannavini, (former) chief executive officer; Renato Semerari, president of Categories and Innovation; Jean Mortier, president, Global Markets division; Marc Rey president of Coty U.S. and senior vice president of North America; Steve Mormoris, chief merchandising officer, Fragrance; Johanna Businelli, chief merchandising officer, Color Cosmetics; Jill Scalamandre, chief merchandising officer, Skincare; Jurgen Scharfenstein chief marketing officer, Body Care.
Major Products: Fragrances, skin care, color cosmetics and body care sold under brands including Adidas, Balenciaga, Beyonce, Bottega Veneta, Calvin Klein, Chloe, Davidoff, Jennifer Lopez, Marc Jacobs, OPI, Philosophy, Playboy, Rimmel, Sally Hansen, Vera Wang.
New Products: Sally Hansen Miracle Gel, Calvin Klein Reveal, Bottega Veneta pour Homme, Lady Gaga Fame, Just Cavalli, DOT Marc Jacobs, See by Chloé, Playboy VIP fragrances, Philosophy Miracle Worker Anti-Aging Liquid Makeup SPF 30; Philosophy Loveswept; Rimmel Scandal’eyes mascara, Rimmel Wonderful.
Comments: Net revenues fell 1.6% like-for-like and 2.1% as reported last year, as Coty continued to find itself in a changing global fragrance and beauty world. The loss was attributed mostly to Color Cosmetics, which was struck by a sharp, 7% like-for-like decline in the nail business, especially with the Sally Hansen brand. Rimmel was a bright spot in the Color Cosmetics category.
Fragrances, and Skin & Body Care, saw modest growth. Fragrances grew 1% like-for-like, with positive performance on the Calvin Klein, Marc Jacobs, Davidoff and Chloe brands. Skin & Body Care also increased 1% like-for-like, with growth across Philosophy, Adidas and Lancaster, partially offset by a decline in TJoy.
By revenue breakdown, Fragrances still led in the company that once dominated the category but has now diversified. Sales of fragrance reached $2.5 billion; Color Cosmetics reported $1.4 billion; and Skin & Body Care, $687 million.
By geographic region, EMEA and Asia Pacific experienced strong momentum, offset by pressure in the Americas. EMEA grew 3%, benefiting from the UK, Travel Retail, Eastern Europe, Middle East and South Africa performance, partially offset by softness in Russia, Germany and Southern Europe. Asia Pacific grew 7% like-for-like, with growth in Southeast Asia and Australia. Revenues in the Americas declined 9%, with pressure in the U.S. and Canada, particularly in the Color Cosmetics segment, partially offset by growth in the Latin America and Travel Retail.
In total, emerging markets grew 10% during the year, accounting for 29% of net revenues in fiscal 2014 compared to 26% in the prior year, on a like-for-like basis.
Commenting on the company’s performance, Michele Scannavini, CEO, said, “In fiscal 2014 Coty made good progress on its strategic objectives by rapidly expanding its business in emerging markets and growing most of its power brands. As a result, the company enjoyed strong performance in Europe, the Middle East and Africa (EMEA) and Asia Pacific, which was more than offset by revenue softness in North America, where our nail and fragrance businesses were impacted by market contraction, trade de-stocking and increased promotional and competitive pressure, mainly in the mass channel.”
Going forward, in FY 2015, Scannavini said they were aiming to return to revenue growth through innovation, continuing expansion in emerging markets and by improving mass business in North America.
In addition, the company implemented a “global efficiency plan,” which is expected to generate over $200 million in annual savings within the next three years.
In October 2013, Coty announced a fragrance partnership with Prada SA to debut a signature scent for the Miu Miu brand.
In February 2014, Coty, which was working on entering international and developing markets with products other than fragrance, announced that it was discontinuing its Chinese skincare brand TJoy. Analysts said Coty had placed Tjoy in a higher price segment, which did not match its product development.
Following Coty’s previous years’ bids for Avon, in May, the company announced that select fragrances would be marketed and sold through Avon Brazil’s network of 1.5 million independent sales representatives in an effort to increase both companies’ global fragrance market share in Brazil.
Also in May, Coty opened a 115,000-square-foot research facility in Morris Plains, NJ, where Sally Hansen brand’s biggest debut of the year, Miracle Gel nail polish, as well as Philosophy’s Time in a Bottle skin-care serum, are the stars.
Focus on Distribution
Clearly, Coty has been focused on increasing global distribution for the past year. In June, Coty made a deal with Li & Fung to distribute some of Coty’s brands in China, including Adidas, Rimmel, and Playboy. The company had also signed a distribution deal with with UAE-based luxury goods distributors, Chalhoub Group to provide consumers in that region with greater access to Coty’s brand portfolio. In November 2013, Coty formed a new wholly owned subsidiary in South Africa to manage and operate its business there and in 13 other African countries.
New Business Model
Also in July, Coty announced a massive reorganization that changed the company’s business model from one having two separate divisions—mass and prestige—to one that instead focuses on product categories, geographic regions and consumer needs. Efforts will be made on increasing sales in emerging markets.
Brands are now divided into four product categories: Fragrance, Color Cosmetics, Skincare and Body Care.
The Global Markets division will be headed by Jean Mortier, who previously headed Coty Prestige. This division will consist of four regions, all headed by senior vice presidents.
At the same time, Coty announced the retirement of Ralph Macchio, Coty’s chief scientific officer and senior vice president of global research and development.
FY 2015 Holds Promise
The new fiscal year may hold signs of a promising future—especially in nails. Scannavini told analysts: “We are particularly excited to see the first sign of a turnaround in our nail business in the beginning of this fiscal year, driven by the launch of the new Sally Hansen Miracle Gel. First sales results are outstanding.”
But things are now up in the air. At press time, after 12 years with Coty, Scannavini announced that he would be leaving the company, citing personal reasons.
New York, NY
www.coty.com
Beauty Sales: $4.6 billion
Key Personnel: Michele Scannavini, (former) chief executive officer; Renato Semerari, president of Categories and Innovation; Jean Mortier, president, Global Markets division; Marc Rey president of Coty U.S. and senior vice president of North America; Steve Mormoris, chief merchandising officer, Fragrance; Johanna Businelli, chief merchandising officer, Color Cosmetics; Jill Scalamandre, chief merchandising officer, Skincare; Jurgen Scharfenstein chief marketing officer, Body Care.
Major Products: Fragrances, skin care, color cosmetics and body care sold under brands including Adidas, Balenciaga, Beyonce, Bottega Veneta, Calvin Klein, Chloe, Davidoff, Jennifer Lopez, Marc Jacobs, OPI, Philosophy, Playboy, Rimmel, Sally Hansen, Vera Wang.
New Products: Sally Hansen Miracle Gel, Calvin Klein Reveal, Bottega Veneta pour Homme, Lady Gaga Fame, Just Cavalli, DOT Marc Jacobs, See by Chloé, Playboy VIP fragrances, Philosophy Miracle Worker Anti-Aging Liquid Makeup SPF 30; Philosophy Loveswept; Rimmel Scandal’eyes mascara, Rimmel Wonderful.
Comments: Net revenues fell 1.6% like-for-like and 2.1% as reported last year, as Coty continued to find itself in a changing global fragrance and beauty world. The loss was attributed mostly to Color Cosmetics, which was struck by a sharp, 7% like-for-like decline in the nail business, especially with the Sally Hansen brand. Rimmel was a bright spot in the Color Cosmetics category.
Fragrances, and Skin & Body Care, saw modest growth. Fragrances grew 1% like-for-like, with positive performance on the Calvin Klein, Marc Jacobs, Davidoff and Chloe brands. Skin & Body Care also increased 1% like-for-like, with growth across Philosophy, Adidas and Lancaster, partially offset by a decline in TJoy.
By revenue breakdown, Fragrances still led in the company that once dominated the category but has now diversified. Sales of fragrance reached $2.5 billion; Color Cosmetics reported $1.4 billion; and Skin & Body Care, $687 million.
By geographic region, EMEA and Asia Pacific experienced strong momentum, offset by pressure in the Americas. EMEA grew 3%, benefiting from the UK, Travel Retail, Eastern Europe, Middle East and South Africa performance, partially offset by softness in Russia, Germany and Southern Europe. Asia Pacific grew 7% like-for-like, with growth in Southeast Asia and Australia. Revenues in the Americas declined 9%, with pressure in the U.S. and Canada, particularly in the Color Cosmetics segment, partially offset by growth in the Latin America and Travel Retail.
In total, emerging markets grew 10% during the year, accounting for 29% of net revenues in fiscal 2014 compared to 26% in the prior year, on a like-for-like basis.
Commenting on the company’s performance, Michele Scannavini, CEO, said, “In fiscal 2014 Coty made good progress on its strategic objectives by rapidly expanding its business in emerging markets and growing most of its power brands. As a result, the company enjoyed strong performance in Europe, the Middle East and Africa (EMEA) and Asia Pacific, which was more than offset by revenue softness in North America, where our nail and fragrance businesses were impacted by market contraction, trade de-stocking and increased promotional and competitive pressure, mainly in the mass channel.”
Going forward, in FY 2015, Scannavini said they were aiming to return to revenue growth through innovation, continuing expansion in emerging markets and by improving mass business in North America.
In addition, the company implemented a “global efficiency plan,” which is expected to generate over $200 million in annual savings within the next three years.
In October 2013, Coty announced a fragrance partnership with Prada SA to debut a signature scent for the Miu Miu brand.
In February 2014, Coty, which was working on entering international and developing markets with products other than fragrance, announced that it was discontinuing its Chinese skincare brand TJoy. Analysts said Coty had placed Tjoy in a higher price segment, which did not match its product development.
Following Coty’s previous years’ bids for Avon, in May, the company announced that select fragrances would be marketed and sold through Avon Brazil’s network of 1.5 million independent sales representatives in an effort to increase both companies’ global fragrance market share in Brazil.
Also in May, Coty opened a 115,000-square-foot research facility in Morris Plains, NJ, where Sally Hansen brand’s biggest debut of the year, Miracle Gel nail polish, as well as Philosophy’s Time in a Bottle skin-care serum, are the stars.
Focus on Distribution
Clearly, Coty has been focused on increasing global distribution for the past year. In June, Coty made a deal with Li & Fung to distribute some of Coty’s brands in China, including Adidas, Rimmel, and Playboy. The company had also signed a distribution deal with with UAE-based luxury goods distributors, Chalhoub Group to provide consumers in that region with greater access to Coty’s brand portfolio. In November 2013, Coty formed a new wholly owned subsidiary in South Africa to manage and operate its business there and in 13 other African countries.
New Business Model
Also in July, Coty announced a massive reorganization that changed the company’s business model from one having two separate divisions—mass and prestige—to one that instead focuses on product categories, geographic regions and consumer needs. Efforts will be made on increasing sales in emerging markets.
Brands are now divided into four product categories: Fragrance, Color Cosmetics, Skincare and Body Care.
The Global Markets division will be headed by Jean Mortier, who previously headed Coty Prestige. This division will consist of four regions, all headed by senior vice presidents.
At the same time, Coty announced the retirement of Ralph Macchio, Coty’s chief scientific officer and senior vice president of global research and development.
FY 2015 Holds Promise
The new fiscal year may hold signs of a promising future—especially in nails. Scannavini told analysts: “We are particularly excited to see the first sign of a turnaround in our nail business in the beginning of this fiscal year, driven by the launch of the new Sally Hansen Miracle Gel. First sales results are outstanding.”
But things are now up in the air. At press time, after 12 years with Coty, Scannavini announced that he would be leaving the company, citing personal reasons.