Coty shakeup signals reset after financial losses and strategic uncertainty
Key takeaways
- Coty is undergoing a leadership shakeup as JAB Holdings moves to reset its strategy following weak financial performance.
- Financial pressure is intensifying, with declining mass-market beauty sales and a FY2025 net loss.
- Strategic uncertainty persists, as Coty weighs potential portfolio changes and prepares for the expiration of the Gucci beauty license in 2028.
Coty is reportedly restructuring its leadership, following a struggling financial performance this year.
According to people familiar with the matter, the beauty conglomerate’s chairman, Peter Harf, will step down, and chief executive Sue Nabi is expected to follow suit.
Controlling shareholder JAB Holdings is moving to reset the group’s direction. The Financial Times has reported that JAB will appoint a new chair, who will, in turn, name a new CEO.
The position-changing strategy responds to the company’s declining financials. The shakeup succeeds a strategic review of Coty, in which it weighed a sale of its mass-market cosmetics portfolio and a possible merger of its mass and prestige fragrance operations.
The cosmetics retailer has struggled during the past years to drive sales in its mass beauty category. The Consumer Beauty (mass market) segment declined significantly this year, noting pressure from softness in mass cosmetics.
In September, Coty launched a review and considered the sale of the unit that houses brands such as Rimmel and Max Factor. The move aimed to cut debt and focus on the better-performing premium fragrances business. The company’s higher-end fragrances and beauty segment was only slightly down, showing modest underlying growth.
In the financial year of 2025, Coty’s net revenue was approximately US$5.89 billion, down about 4% year-over-year on a reported basis. Like-for-like revenue declined about 2%.
The company reported a net loss of roughly US$381 million, compared with a net income of about US$76 million in the same period last year. Coty expects a return to growth in the second half of fiscal year 2026, anticipating sequential improvement and better results in later quarters.
Coty’s prolonged underperformance has resulted in its share price falling approximately 55% over the past year.
Gucci loss
Coty will lose its license for Gucci fragrance and beauty products in 2028. The financial hit is a result of Kering agreeing to sell its beauty division to L’Oreal.
Coty’s mass-market beauty business continues to struggle. Gucci is estimated to contribute approximately 9% of Coty’s revenue.
According to the Financial Times, Coty’s CEO, Nabi, declined offers from L’Oreal to end the Gucci license early.
“Gucci, Bottega Veneta, and Balenciaga are all exceptional couture brands with enormous potential for growth,” said Nicolas Hieronimus, L’Oréal’s CEO, about its purchase.
Big business moves
The expected senior leadership changes follow other financial turbulence in the personal care industry this winter.
Estée Lauder Companies’ restructuring program was reported to cost more than the US$500–$700 million figure the group first expected, with approved charges reaching US$1.14 billion.
Earlier, Kenvue was reported to be considering selling or spinning off its skin health and beauty unit due to sales slumps and damaging health allegations surrounding its pain reliever, Tylenol. However, in November, Kimberly-Clark announced it would buy Kenvue in a deal valued at US$48.7 billion.
