Coty, Inc.

Coty, Inc.
Public
Traded as NYSE: COTY
Industry Beauty
Founded 1904 in Paris, France
Headquarters New York City, United States
Key people
 Bart Becht, Chairman & Interim CEO
Products Fragrance
Cosmetics
Skin care
Revenue US$4.5 billion (2015)
Owner JAB Holding Company
Berkshire Partners
Rhône Group
Number of employees
 12,000 worldwide
Website coty.com

Coty, Inc., is an American beauty products manufacturer based in New York founded in Paris, France, by François Coty in 1904. Its main products are fragrances, color cosmetics and skin and body care products.[1] It is known for its cooperation with designers and celebrities for the creation of fragrances.[2] Its biggest brands, or "power brands" as it calls them, are: Calvin Klein (fragrance and cosmetics), Chloe (fragrance), Davidoff (fragrance), y (fragrance), Marc Jacobs (fragrance), Philosophy (beauty), Adidas (fragrance and beauty), Playboy (fragrance), OPI Products (beauty), Rimmel London (make-up) and Sally Hansen (beauty).[3]

History

1930s, 1940s and 1950s

In 1904, François Coty founded Coty in Paris, with a goal to revolutionize the fragrance industry. In 1912, Coty opened subsidiaries in London and New York. Coty, Inc., became a publicly traded company in 1925 and acquired a majority interest in the European Coty companies in 1929.

During the Great Depression, sales in the United States fell from US$50 million in 1929 to $3.5 million in 1933. According to The New York Times, management 'compounded its mounting problems by slashing prices in a desperate effort to gain a mass market ... a near-fatal move in a field in which prestige and the luxury symbol were vital.' With World War II imminent, the foreign companies were folded into the newly created Panama-based Coty International Corporation in 1939. The ownership remained the same, and the two corporations had interlocking directorships.

The ownership transferred from Coty to his ex-wife Yvonne, who had, by then, married Leon Cotnareanu. The management was taken over by the Cotnareanu family and passed on to Philip Cotnareanu, who changed his name to Philip Cortney, over time.

After the Great Depression, Philip secured bank financing to keep Coty going and, in one of his first decisions, raised prices for the entire line. In spite of a long-range program to double the company's retail business, he cut off drugstores carrying Coty products if they would not agree to provide display space of at least 16 feet in length for exclusive stocking of these goods. Production lines were automated, packaging restyled, and new lines of goods added periodically, including, in 1955, a new toilet-goods line for men named 'Preferred Stock'. Research laboratories were established in Morris Plains, New Jersey, and overseas.

In 1946, Coty's first postwar year, sales nearly doubled from the 1941 total, to US$19.1 million, and net profit reached $1.24 million. The company lost money in 1947, however, and, although it returned to profitability, sales stagnated. Fiscal 1955 (the year ended June 30, 1955) was Coty's best postwar year, with net income of $1.61 million on sales of $22.76 million. The firm lost money in fiscal 1957 and 1958, with management blaming the results on the high cost of advertising, which rose from 7% to 16% of sales in this period. Moreover, firms like Revlon, Inc., which reaped huge publicity from its sponsorship of television's The $64,000 Question, seemed to be getting better results for the money. In fiscal 1962, Coty had net income of only $386,985 on sales of $25.46 million. Coty International had a profit of $319,331 on sales of $7.38 million.

1960s and 1970s

Coty and Coty International were sold in 1963 to Chas. Pfizer & Co. for about US$26 million and became divisions in the pharmaceuticals company's consumer products group. In 1965 Coty introduced Imprevu, its first new perfume in 25 years. This became the leading Coty fragrance by the end of 1968.

Coty and Coty International were united in 1973. Among the new products introduced in the early 1970s were the Styx, Sweet Earth, and Wild Musk fragrances and the Equatone beauty-treatment line. The production facility was moved from New York City to Sanford, North Carolina, at this time. Coty products were being marketed to franchised accounts, including distributors, independent drugstores, mass merchandisers, and department stores. Results were not meeting expectations, however, for the subsidiary was reported to be on the block in 1974 for possibly as little as $20 million—less than Pfizer had paid a decade earlier.

1990s

Coty was purchased in 1992 by Benckiser Consumer Products, the U.S. arm of a family-owned German household-products giant named Joh. A. Benckiser GmbH.[4] In 1993 Benckiser merged into Coty its Quintessence Inc. unit, which it had acquired the previous year. Coty, Inc., grew into a US$1.5-billion-a-year company in 1996, when Benckiser made its Lancaster Group a Coty division. (The existing Coty, renamed Coty Beauty, became the other division.) Lancaster, founded in Monaco in 1946 and acquired from SmithKline Beecham plc in 1990.

During the year of 1998, 45 percent of the company's sales were in mass fragrances, 24 percent in mass cosmetics, and 31 percent in prestige-market beauty products. Fifty-five percent of sales volume came from Western Europe and 30 percent from North America.

Recent history

In May 2005, Unilever announced that it had signed a definitive agreement to sell its global prestige fragrance business, Unilever Cosmetics International (UCI), to Coty, Inc., of the United States.[5] However, several major brands were sold to Elizabeth Arden.

Unilever reportedly received a consideration of US$800 million in cash at the closing, with the opportunity for further deferred payments contingent upon future sales.

The business included the perfume licenses for Calvin Klein, Cerruti, Vera Wang, Chloé and Lagerfeld, as well as a manufacturing and distribution center in Mount Olive, New Jersey, which was later closed in June 2007 as operations were transferred to the existing Coty-Sanford, North Carolina, facility.

Sales for the global prestige fragrance business for 2004 were in excess of $600 million (€490m). In December 2007, Coty announced the acquisition of DLI Holding Corp.[6]

The Calgon and Healing Garden brands were purchased by Ascendia Brands on 9 February 2007.[7]

In August 2009, Coty, Inc., announced that it had entered into a license agreement with global lifestyle brand GUESS?, Inc., to develop and market new GUESS fragrance lines. As part of the partnership, Coty would also distribute existing GUESS fragrances, effective January 2010.[8]

In November 2010, Coty, Inc., announced that Coty has entered into an agreement to acquire philosophy, inc., from the Carlyle group.[9] In early 2011, Coty, Inc., announced that it had officially concluded the acquisitions of Dr. Scheller Cosmetics,[10] OPI Products, Inc.,[11] and TJoy.[12]

In July 2012, Coty, Inc., appointed Michele Scannavini as the new CEO. Scannavini has been president of Coty Prestige for the last 10 years.[13]

Coty, Inc., is No. 2 global position in fragrances, No. 6 global position in color cosmetics and strong regional presence in skin & body care. Coty, Inc., headquartered in New York City, has more than 10,000 employees worldwide.

On June 13, 2013, Coty, Inc., went public on the NYSE. Coty raised $1.0 billion in the largest consumer IPO since Arcos Dorados' $1.3 billion IPO in 2011. The company operates in three segments: fragrances, color cosmetics and skin and body care.[14]

In June 2014, Coty has discontinued TJoy.[15] On September 29, 2014, Michele Scannavini had stepped down from the CEO position.[16]

On July 9, 2015, Coty announced it had reached a definitive agreement to purchase some of Procter & Gamble's beauty brands for $12.5 billion in a deal that would more than double its sales and transform it into one of the world’s largest cosmetics companies.[17]

Manufacturing

Coty's manufacturing facilities are located in Ashford, United Kingdom; Granollers, Spain; Chartres, France; Monaco; Jiangsu Province, China; Sanford, North Carolina, Los Angeles, California, and Phoenix, Arizona, United States.[18]

References

  1. ↑ "Nasdaq profile". Nasdaq.com. Retrieved 2013-11-04.
  2. ↑ "Kate Moss Fragrance on the Horizon" Rogue Connect, December 16, 2006
  3. ↑ Coty Website, , 2015
  4. ↑ "Pfizer Selling Its Coty Unit to German Company : Restructuring: The divestiture will allow the pharmaceutical firm to focus on health care.". The Los Angeles Times. May 5, 1995. Retrieved July 23, 2015.
  5. ↑ "Coty to Buy Unilever's Perfume Business". May 21, 2005. The Los Angeles Times. Retrieved July 23, 2015.
  6. ↑ "Coty Inc. and Del Laboratories, Inc. Announce Acquisition of Del Laboratories, Inc. by Coty Inc.". PRNewswire. December 7, 2007. Retrieved July 23, 2015.
  7. ↑ "Ascendia Brands, Inc. Agrees to Acquire the healing garden® and Calgon® from Coty Inc.". Businesswire. January 18, 2007. Retrieved July 23, 2015.
  8. ↑ "Coty Inc. and GUESS?, Inc. Announce Collaboration to Develop and Market New Fragrance Lines". PRNewswire. August 13, 2009. Retrieved July 23, 2015.
  9. ↑ "Coty Agrees to Buy Philosophy Skincare From Carlyle". Bloomberg. November 23, 2010. Retrieved July 22, 2015.
  10. ↑ "Coty Inc. Announces Acquisition of Dr. Scheller Cosmetics AG". PRNewswire. November 12, 2010. Retrieved July 23, 2015.
  11. ↑ "Coty Agrees to Acquire Nail-Polish Maker OPI Products". Bloomberg. November 29, 2010. Retrieved July 23, 2015.
  12. ↑ "Coty Pays $400 Million to Buy Controlling Stake in China’s TJoy". Bloomberg. December 12, 2010. Retrieved July 23, 2015.
  13. ↑ "Michele Scannavini, Coty Prestige President, Is Named Company's New Chief Executive Officer". PRNewswire. July 25, 2012. Retrieved July 22, 2015.
  14. ↑ "Coty makes its public debut". CNN Money. June 13, 2013. Retrieved July 22, 2015.
  15. ↑ "Coty Pulls TJoy From China". Forbes. June 5, 2014. Retrieved July 22, 2015.
  16. ↑ "Coty CEO Scannavini to step down, Becht to become interim chief". CNBC. September 29, 2014. Retrieved July 22, 2015.
  17. ↑ "P&G Set to Sell $12 Billion Worth of Its Beauty Brands to Coty". Forbes. June 18, 2015. Retrieved July 22, 2015.
  18. ↑ http://www.coty.com/company/coty-snapshot

External links

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