Coty, Inc.

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Coty, Inc.
Type Public
Traded as NYSECOTY
Industry Beauty
Founded 1904 in Paris
Headquarters New York City
Key people

Michele Scannavini, CEO

Bart Becht, Chairman
Products Fragrance, Color Cosmetics, Skin & Body Care
Revenue $4.6 billion (2012)
Owners Joh. A. Benckiser
Berkshire Partners
Rhône Group
Employees 12,000 worldwide
Website www.coty.com

Coty, Inc. is a global beauty products manufacturer founded in Paris, France by François Coty in 1904. Its main products are fragrances, color cosmetics and skin & body care products.[1] It is known for its cooperation with designers and celebrities for the creation of fragrances.[2]

History[edit]

1930s, 1940s and 1950s[edit]

Coty is privately owned by Joh. A. Benckiser GmbH, the German holding company that manages the interests of the family of Johann A. Benckiser. Coty was acquired in 1996 to operate its fragrance and cosmetics businesses. The company was a subsidiary of Pfizer from 1963 to 1992. Coty acquired Unilever's fragrances division (UCI) in May 2005. Coty, Inc. became a publicly traded company in 1925 and acquired a majority interest in the five European Coty companies in 1929.

During the Great Depression, sales in the United States fell from $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 Corp. in 1939. The ownership remained the same, and the two corporations had interlocking directorships.

Cotnareanu, who changed his name to Philip Cortney, 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 $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[edit]

Coty and Coty International were sold in 1963 to Chas. Pfizer & Co. for about $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[edit]

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. In 1993 Benckiser merged into Coty its Quintessence Inc. unit, which it had acquired the previous year. Coty, Inc. grew into a $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[edit]

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. However, several major brands were sold to Elizabeth Arden.

Unilever reportedly received a consideration of $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 Mt. Olive, New Jersey, which was later closed in June 2007 as operations were transferred to the existing Coty-Sanford, N.C. 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.

The Calgon and Healing Garden Brands were purchased by Ascendia Brands on 9 February 2007.[3]

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 will also distribute existing GUESS fragrances, effective January 2010.[citation needed]

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

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

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., headquarters in New York City, has more than 10,000 employees worldwide.

In 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 & Body Care.

Manufacturing[edit]

Coty's manufacturing facilities are located in Ashford, UK; Granollers, Spain; Chartres, France; Monaco; Jiangsu Province, China; Sanford, North Carolina, Los Angeles, California, Phoenix, Arizona, USA.[4]

References[edit]

  1. ^ "Nasdaq profile". Nasdaq.com. Retrieved 2013-11-04. 
  2. ^ "Kate Moss Fragrance on the Horizon" Rogue Connect, December 16, 2006
  3. ^ [1][dead link]
  4. ^ http://www.coty.com/company/coty-snapshot
  • Boorstin, Julia (November 14, 2005). "The Scent of Celebrity". Fortune, p. 37–40.

External links[edit]