Coty may be about to streamline its brand portfolio

According to Women’s Wear Daily, Coty may be about to divest itself of ten of its fragrance licences and brands, including David Beckham, Beyoncé, Katy Perry and Guess. Last April, the US cosmetics group sold the Jennifer Lopez fragrance licence to the Designer Parfums group, where it joined the Naomi Campbell and Ariana Grande licences.

The Coty group's media department stated it would not "comment on the rumours and speculations." However, last August, when Coty published the results of its 2017 fiscal year, CFO Patrice de Talhouët indicated that the group, in the context of a rationalisation of its portfolio, was considering the sale or discontinuation of a series of brands which altogether accounted for between 6% and 8% of its net revenue. The operation, he added, would likely take place in the course of the 2018 fiscal year, though no specific brand was mentioned.

It is a fact that, in the last few years, celebrity fragrances have enjoyed sub-par performances. For example, according to the NPD group, celebrity fragrance sales in the USA fell by 66% between 2011 and 2014.

In the latest fiscal year, closed on 30th June, Coty reported a revenue of $7.650 billion (€6.5 billion), equivalent to an exceptional 76% rise. This exponential leap is due to the addition to Coty's portfolio of 41 brands from the Procter & Gamble group, and to the purchase of GHD and Younique. However, the group recorded a net loss of $437.8 million, compared to a $254.2 million profit a year earlier. This was notably due to rising costs linked to the group's restructuring and acquisitions.

Coty may be about to streamline its brand portfolio

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