Coty and Burberry have entered into strategic partnership in beauty. Coty has acquired the exclusive long-term global license rights for Burberry Beauty luxury fragrances, cosmetics and skincare. “This strategic partnership combines Burberry’s British heritage of innovation, craftsmanship and design with Coty’s expertise and leadership in luxury beauty products,” said Coty in a release.

Under the agreement, Coty will develop, manufacture and distribute the full range of Burberry Beauty products globally. In parallel, Japanese beauty group Shiseido has announced that it has decided to terminate its global distribution agreements with the luxury brand.

Burberry is an iconic luxury brand. It fits perfectly with Coty Luxury’s portfolio, which includes contemporary and globally relevant prestige beauty brands. We are uniquely positioned to develop Burberry Beauty to the next level. This is another significant step in building Coty’s Luxury division,” said Edgar Huber, President Coty Luxury.

The Burberry Beauty business will be managed within Coty’s Luxury division. Headquartered in Paris, Coty Luxury develops, produces, markets and distributes globally a range of fashion house fragrances including Gucci, Marc Jacobs, Hugo Boss, Calvin Klein, Alexander McQueen, Bottega Veneta and Balenciaga, as well as premium cosmetics and skin care under the philosophy, Lancaster and Gucci brands.

It is a major reversal in strategy for Burberry. The Coty deal comes just four years after Burberry ended its partnership with Interparfums and took its beauty business in-house. However, the brand never reach the minimum critical size in its competition with major beauty players.

The deal, which is subject to customary regulatory approvals, is expected to close in calendar Q4 2017, at which point Coty will buy from Burberry approximately £50M of inventory.