Bids for Coty’s Beauty Brands Stall Amid COVID-19 Crisis
By Beauty Packaging Staff | 05.04.20
Henkel and KKR want to fully assess the impact of coronavirus before they commit to anything.
Henkel and U.S. buyout fund KKR are holding off on bids for a portfolio of beauty brands that Coty Inc. is trying to sell, according to a report from Reuters.
Coty’s professional beauty unit, which primarily sells professional hair and nail care products to salons, accounts for about 21% of its total revenue, with annual sales of about $1.81 billion. The portfolio was expected to fetch about $7 billion earlier this year, sources had said, before the coronavirus ravaged the market, redirecting consumers’ focus towards online beauty products including home dye kits.
The sale has hit a snag as hair salons and nail bars remain shut in most countries around the world. Prospective bidders want to assess the impact of the industry shutdown on Coty’s brands which include Wella, Clairol, GHD and OPI nail polish, before they go through with anything.
With the sale previously thought to have been wrapped up by this summer, acquiring finance for the deal is also becoming difficult.
Potential Bidders
Henkel was targeting specific brands including hair specialist Wella rather than the entire portfolio but would not commit to a bid until it has more visibility on the industry downturn, the sources said.
KKR was initially looking to purchase the entire unit and bet on its turnaround. Now, it is taking a cautious approach and wants to review Coty’s portfolio at a later stage when the fallout of the pandemic will be fully reflected on Coty’s balance sheet.
Coty’s professional beauty unit, which primarily sells professional hair and nail care products to salons, accounts for about 21% of its total revenue, with annual sales of about $1.81 billion. The portfolio was expected to fetch about $7 billion earlier this year, sources had said, before the coronavirus ravaged the market, redirecting consumers’ focus towards online beauty products including home dye kits.
The sale has hit a snag as hair salons and nail bars remain shut in most countries around the world. Prospective bidders want to assess the impact of the industry shutdown on Coty’s brands which include Wella, Clairol, GHD and OPI nail polish, before they go through with anything.
With the sale previously thought to have been wrapped up by this summer, acquiring finance for the deal is also becoming difficult.
Potential Bidders
Henkel was targeting specific brands including hair specialist Wella rather than the entire portfolio but would not commit to a bid until it has more visibility on the industry downturn, the sources said.
KKR was initially looking to purchase the entire unit and bet on its turnaround. Now, it is taking a cautious approach and wants to review Coty’s portfolio at a later stage when the fallout of the pandemic will be fully reflected on Coty’s balance sheet.
