10.30.13
11. Coty
www.coty.com
Beauty Sales: $4.7 billion
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CEO Michele Scannavini said: “Coty delivered another year of positive financial performance.” |
Major Products: Fragrances, color cosmetics and skin and body care marketed under Coty Prestige and Coty Beauty divisions. Brands include Adidas, Calvin Klein, Chloé, Davidoff, Halle Berry, Jennifer Lopez Fragrances, Katy Perry, Lady Gaga, Marc Jacobs Fragrances, OPI, Philosophy, Playboy, Rimmel, Sally Hansen, Vera Wang Fragrances.
New Products: Katy Perry Killer Queen, Marc Jacobs Honey, Downtown Calvin Klein, Halle Berry Jasmine, JLove, See by Chloé, Rimmel Scandaleyes Show Off Mascara, OPI San Francisco Collection, Sally Hansen Fuzzy Coat.
Comments: It was a rough and tumble year for Coty.After a change in top leadership and failed attempts to purchase Avon to instantly boost global market share, the resilient global fragrance and beauty company filed a long-awaited IPO in June, and instituted a number of organizational changes aimed at pursuing international growth on its own.
Commenting on the company’s performance, Michele Scannavini, CEO of Coty Inc., said, “Coty delivered another year of positive financial performance. Our increase in net revenues was driven by growth in our Fragrances and Color Cosmetics segments as well as positive developments across all regions, particularly the emerging markets.”
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Halle Berry’s sixth scent for Coty features a bottle with a modern prism-shape, embossed with a beautiful array of jasmine flowers. |
In fragrance, new launches DOT Marc Jacobs, See by Chloe, and Playboy VIP proved highly successful. Also driving segment growth was the newly established brand Lady Gaga Fame and the strengthening of the Roberto Cavalli brand through new launches, including what Coty said was the extremely successful special edition fragrance for the Middle East, Roberto Cavalli Oud.
As far as color cosmetics, N.Y.C. New York Color and Manhattan, the company’s entry price level brands, also helped boost the segment. Nail care brands OPI and Sally Hansen remained stable versus last year, though Scannavini recently commented on a noticeable decline in this market segment and acknowledged its future effect on inventory and sales.
Adidas net revenues were impacted by lackluster conditions in Europe and the lack of major sport events-related promotions such as the prior year’s Euro Cup efforts. Still, Adidas experienced strong double-digit growth in China. Philosophy picked up speed in the second half of the fiscal year. In 2013, Jill Scalamandre was brought in to take charge of the cheeky skin care brand.
By region, the largest increase in net revenues came from the U.S., followed by Latin America and Canada. Higher net revenues in the U.S. were due to new fragrance launches from power brands Marc Jacobs, Calvin Klein and Chloe. Emerging markets in the region, particularly Brazil, Mexico and Argentina, experienced strong double-digit growth.
In Europe, the Middle East & Africa, growth was driven by emerging markets, primarily Russia and the Middle East. Travel Retail also delivered double-digit growth.
Asia Pacific delivered double-digit growth as well. In South East Asia, this was due mostly to Calvin Klein, Chloe, Marc Jacobs, and the introduction of Philosophy. Australia heated up due to growth in Fragrances and expanded distribution of the Rimmel brand.
Emerging markets now represent 24% of total net revenues, up from 23% in the prior year.
During the past year, Coty made a number of executive management changes on the heels of naming its new CEO. Among them, Stephen Mormoris was appointed SVP global marketing American fragrances, Coty Prestige. Johanna Businelli was named SVP marketing color cosmetics, Coty Beauty. Catherine Walsh was elevated to the newly created position of senior vice president of corporate communications of the parent company, Coty Inc. Her appointment signals Coty’s intention of stepping up its brand building to make the Coty name a widely recognized global entity. Toward the end of 2012, Marc Rey was announced as the new regional vice president of Coty Prestige, North America.
Also late in 2012, Coty Inc., announced the signing of eight-time Grammy nominee Katy Perry to develop and market her own line of signature fragrances. As part of the project, Coty will also distribute the artist’s successful existing fragrance portfolio, comprised of Purr and Meow!.
A few notable highlights of 2013:
In March, Chloé expanded its beauty footprint from fragrance to facial skin care—in Asia. Color cosmetics are to follow.
In May, Coty made two purchases in a global expansion effort. It acquired StarAsia, an established distributor of beauty products in the markets of Southeast Asia. At about the same time, the emerging leader in global beauty announced a joint venture in Brazil with Frajo Internacional, a leading Brazilian cosmetics distributor.
Jennifer Lopez will launch her 20th fragrance— JLove—with Coty this month. The square double-wall bottle features a trendy cap with a bold leopard pattern. Shiny fire-engine red is used for the logo, as well as for the bottle’s neck, collar and actuator. The fruity scent is by Firmenich.
Looking ahead to 2014, Coty reported that it has seen a deceleration of market growth in the U.S. and Europe, triggering significant trade de-stocking activity, particularly by U.S. mass retailers. Thus, the company estimates that net revenues in the first quarter of fiscal 2014 will marginally decline versus the prior year period. Following that, it expects to return to in line—or greater than the market—growth, and foresees that its new investments in emerging markets will pay off.
Scannavini said focus will remain on the company’s Top 10 brands.
