Coty (NYSE:COTY) revealed on Tuesday that it has launched a strategic review of its consumer beauty division, as the company turns greater attention toward its higher-margin fragrance business.
The company is now aligning its Prestige Beauty and Mass Fragrance operations more closely. Fragrances currently represent 69% of Coty’s total sales, and the integration is expected to enhance efficiencies across R&D, consumer insights, manufacturing, and distribution. Coty shares gained 1% in premarket trading on the news.
This move follows a weaker quarterly sales forecast last month, which Coty attributed to softer product demand. While the company had previously invested heavily in its U.S. mass beauty segment, it has since shifted its focus toward fragrances as online, lower-cost brands increased competition in the mass beauty category.
The review will focus on the $1.2 billion mass color cosmetics portfolio—including CoverGirl, Rimmel, Sally Hansen, and Max Factor—along with Coty’s Brazilian operations, which generate close to $400 million in revenue.
Coty said it will consider multiple options, such as partnerships, divestitures, or spin-offs. It also intends to unify all fragrance and scenting labels under a single structure to strengthen the core business while maintaining measured growth in cosmetics and skincare.
“This next phase of our transformation is about clarity and focus,” CEO Sue Nabi said.
Coty appointed Gordon von Bretten, a board member and former chief transformation officer, as president of the consumer beauty division. He will lead the strategic review and join Coty’s Executive Committee, taking full responsibility for the company’s mass cosmetics, skin, and personal care businesses.
As part of the restructuring, Chief Brands Officer Stefano Curti and Chief Commercial Officer of Consumer Beauty Alexis Vaganay will step down from their roles.
“This new structure will also drive renewed momentum and sharper focus for consumer beauty, positioning it to compete more effectively in the evolving beauty landscape,” Nabi added.
Last month, Coty projected a 6%–8% drop in first-quarter like-for-like sales, citing weaker U.S. demand. To mitigate the impact of President Trump’s 15% tariffs on European imports, the company plans to raise prices in its premium fragrance segment and relocate some production domestically.
Coty expects new product launches to support a return to sales growth in the second half of the year.
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