The U.S. beauty conglomerate has reviewed its global strategy with the aim to accelerate growth. Coty intends to reposition and rejuvenate key consumer brands, build on its prestige makeup and skin care businesses and accelerate operations in China and online.
In a presentation to investors, Coty Chief Executive Officer, Sue Y. Nabi, has unveiled its long-term strategy, underpinned by six priorities:
Stabilization of consumer beauty make-up brands and mass fragrances;
Acceleration of luxury fragrances and establishing Coty as a key player in prestige make-up;
Building a skincare portfolio across prestige and mass divisions;
Enhancing e-commerce and Direct-to-Consumer (DTC) capabilities;
Expanding in China through prestige and select consumer beauty brands;
Establishing Coty as an industry leader in sustainability.
In this context, Coty will rejuvenate and reposition several key brands. This involves plans to bolster CoverGirl, Sally Hansen, Rimmel, Max Factor, and Adidas.
Comprehensive skincare portfolio
Coty intends to build its skincare portfolio across Mass and Prestige, capitalizing on key trends like regenerative medicine and creating products that are truly green, clean and sustainable. Coty currently has three skincare brands, with a fourth brand, SKKN by Kim, launching in Fiscal Year 2022.
Within its existing skincare portfolio, Coty will reposition Lancaster to transform it from a regional UV protection brand to a leader in skincare enhancement and renewal, while Philosophy is expected to move from being a U.S.-centric wellbeing beauty brand to a leader in green, clean ‘ceutical’ skincare.
By Fiscal Year 2025, Coty is targeting: skincare to increase from approximately 6% to over 10% of the revenue mix.
Accelerating growth in Prestige
In addition, Coty intends to enhance the performance of its luxury business. As far as fragrance are concerned, Coty expects to bring more iconic female fragrances to market and expand its presence in artisanal fragrances.
The company underlines it has no major luxury licenses expiring based on their terms over the next five years. Additionally, many of Coty’s licensing agreements with luxury brands enable the potential for extension into additional beauty categories, such as cosmetics and skincare.
Expanding in China
Eventually, Coty expects China’s contribution to triple to over 10% of the revenue mix by fiscal Year 2025.
The performance of the company’s brands in China and its growing footprint in emerging Travel Retail destinations (like Hainan) reinforce Coty’s confidence in its ability to capture market share and growth in the region. Coty also expects a rebound in the Travel Retail sector after a challenging 12 months, with indicators suggesting strong pent-up demand for international travel.
Gucci Beauty has also seen outstanding success since opening the brand’s Tmall flagship, making it one of Tmall’s top four luxury beauty brand openings since 2018. Coty also noted the significant growth opportunity for leading artisanal fragrance brands in China, including Chloe, Tiffany & Co., and Bottega Veneta.