Coty is made up of three divisions: Consumer Beauty; Luxury and Professional Beauty. I am general counsel for the Professional Beauty division. My role covers a whole host of legal work associated with the commercial branch of the company.
At 2pm on 21 October 2019, the Professional Beauty division was announced to be sold. Now starts the whole bidding process. There are already companies who have shown interest, but the whole sale process is expected to be completed by Easter 2020. It’s a pretty tight deadline, but it is doable. The announcement comes as Coty reveals plans to focus on its fragrances, cosmetics and skin care business operations.
Coty has a $7.4bn debt, following its Procter and Gamble (P&G) acquisition – which was a $12bn deal. The integration of P&G beauty brands have been more difficult than expected. Brands such as Sally Hansen and CoverGirl were not in the financial shape they were thought to be at the moment of the acquisition. As a result, Coty started to have financial difficulties.
To address these difficulties, JAB – a private equity fund which has a 60% stake in the company – appointed a new CEO, a new CFO, a new head of supply chain and a new head of HR. On 1 July, the board and the executive committee announced a turnaround plan that would transfer all business operations to Amsterdam.
In an effort to manage business operations, the sale of the Professional Beauty division will allow the company to repay part of the debt, to pay out shareholders and to potentially invest some of the funds back into parts of the business they want to focus on.
Since joining Coty, the company has been very unstable. I have learnt a lot, and working here has been a great opportunity to test resilience. The most difficult part has been managing reactions across the company and reminding co-workers that this news is not necessarily bad. Change comes with new opportunities. If professional beauty is not the focus for Coty, we are better off becoming part of a company that wants to focus on professional beauty.
Yet who will be the new buyer remains uncertain, no one can predict who will take over. So there is a lot going on at the moment. I must say that Sylvie Moreau, the president of Professional Beauty here at Coty is doing an amazing job at keeping people together. She is excellent with dealing with people. Now our focus has been what is next for us. We have 330 people whose jobs will be impacted by this change. Our aim now is to manage expectations and to strike a fair balance between protecting the interests of employees and protecting the interests of the company.