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Cosmetics maker Coty on Tuesday said it had launched a strategic review of its consumer beauty business that could lead to the sale of brands such as CoverGirl and Rimmel, as it plans to focus on its more profitable fragrances unit.
Retailers in the US have become increasingly cautious due to tariffs and are destocking inventories as cost-conscious consumers tighten spending on some beauty and skincare products.
Last month, Coty projected a quarterly sales decline as demand for its beauty products softened. The company had disproportionately invested into its US mass beauty business at the expense of its fragrance unit but later shifted course as mass beauty struggled amid tough competition from lower‑priced online rivals.
Its review will focus on the $1.2 billion mass colour cosmetics segment, which includes brands such as Covergirl, Rimmel, Sally Hansen and Max Factor, as well as its standalone Brazil business, and will explore all options, including partnerships, divestitures, and spin-offs.
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Coty plans to consolidate all fragrance and scenting brands to reinforce its fragrance business, which is the primary driver of its revenue and profit, while aiming to maintain steady growth in cosmetics and skincare.
“This next phase of our transformation is about clarity and focus,” CEO Sue Nabi said.
Gordon von Bretten, Coty’s board member and former chief transformation officer, will lead the consumer beauty unit as president, and will also head the strategic review.
As part of the reorganisation, chief brands officer Stefano Curti and chief commercial officer of Consumer Beauty Alexis Vaganay will step down, the company said.
“This new structure will also drive renewed momentum and sharper focus for consumer beauty, positioning it to compete more effectively in the evolving beauty landscape,” CEO Nabi said, adding she aims to grow Coty’s prestige portfolio through blockbuster launches and brand elevation.
The news was first reported by The Wall Street Journal earlier on Tuesday.
By Nilutpal Timsina, Shivani Tanna and Ruchika Khanna; Editors: Adam Jourdan, Louise Heavens and Arun Koyyur
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Rumours have swirled in recent weeks that the American cosmetics company is looking to offload its consumer and prestige brands. In a cooling market and with a mixed portfolio, finding buyers is a hard sell.
