Coty announced last week their intention to purchase the Bourjois cosmetics brand from Chanel.
According to Ildiko Szalai, Senior Analyst - Beauty and Personal Care Research at Euromonitor, the purchase of Bourjois falls in line with Coty’s core strategy of high-speed expansion through acquisitions. “The integration of the brand adds a percentage point market value share to Coty’s Colour Cosmetics portfolio,” he says. Bourjois also registers global level sales in mass deodorants and fragrances in 2013.
“However, the deal does not offer strong expansion into dynamic emerging markets or skin care categories,” Szalai adds.
Actually, over 55% of Bourjois’ sales is generated in Western Europe, where Euromonitor forecasts a bleak outlook for colour cosmetics category with less than 1% Compound Annual Growth Rate (CAGR) over the 2013-2018 period. Although a growing proportion of the brand’s sales is generated in the Middle East and Africa, the most attractive region for colour cosmetics up to 2018.
However, “Coty could build good operational synergies for Bourjois with its Rimmel and Astor brands to aid further geographic expansion and benefit from larger scale of economies in mass colour cosmetics.”