Beauty giant Coty is reportedly in the early stages of exploring a potential two-part sell-off involving its luxury and consumer divisions.
Sources told WWD that Coty is considering separating its prestige fragrance and beauty brands - such as Gucci, Burberry, Hugo Boss, and Jil Sander - from its mass-market portfolio, which includes Covergirl, Rimmel London, and Max Factor.
The publication revealed that the company is in discussions with Interparfums regarding its luxury business, although sources suggest that Interparfums may be interested in acquiring only select fragrance brands, such as Burberry and Hugo Boss.
For this reason, one source said that a potential deal for Coty’s fragrance business might take the form of a strategic partnership or merger rather than a full acquisition.
"Overall, we are always inclined to look when opportunities present themselves," said a spokeperson for Interparfums SA.
It comes after Coty reported a 6% decline in revenue to $1.299 billion (£978 million) for the third quarter ending 31 March, but anticipates a return to growth as it advances efforts to streamline operations.
Prestige revenue dropped 4% to $829.4 million (£625 million), impacted by declines in prestige makeup sales, a moderating prestige fragrance category, and elevated prior year comparisons related to major fragrance launches.
Meanwhile, the consumer beauty division saw revenue decrease 9% to $469.7 million (£353 million). This reflected lower sales in colour cosmetics and bodycare, partially offset by growth across mass fragrance and mass skincare.
The company said its cost-saving scheme is designed to create a simplified, scalable operating model, reduce complexity across functions and markets, and sharpen its focus on key innovations and strategic market priorities. It is planning to cut up to 700 jobs as part of the initiative.
