About Noxell Corporation
For perfume giant Coty, the sweet smell of success is on retail shelves worldwide. The company is one of the leading makers of fragrances and beauty products for men and women across the globe. Its lineup ranges from moderately priced scents and cosmetics sold by mass retailers to prestige fragrances and premium skincare products found in department stores and upscale boutiques. Coty also make hair and nail care products for professional salons. The company’s 75-plus owned or licensed brands include some of the world's most well-known, including COVERGIRL, Max Factor, philosophy, Escada, Calvin Klein, and Stetson. It generates most of its revenue outside North America. With a history that dates to 1904, Coty has used acquisitions to power its growth.
Coty divides its activities among three product segments: consumer beauty, luxury, and professional beauty.
The consumer beauty segment accounts for about 45% of total revenue and includes color cosmetics, retail hair coloring and styling products, body care products, and mass fragrances. Brands include Clairol, CoverGirl, Max Factor, Rimmel, and Sally Hansen.
The company generates about 35% of revenue from the prestige fragrances, premium skincare, and premium cosmetics of its luxury segment, which includes Burberry, Calvin Klein, Escada, and philosophy among its brands.
With brands such as Sassoon Professional and Clairol Professional, Coty generates the remainder of its revenue with sales to hair and nail salons and salon professionals.
The company generates about 40% of revenue from its licensed brands.
Truly a global company, Coty generates nearly 70% of revenue outside North America; Europe accounts for about 45%.
It has offices in more than 35 countries and distributes products in some 150 countries. The company’s major facilities are located in Brazil, China, France, Germany, Mexico, Monaco, Russia, Spain, Switzerland, Thailand, the UK, and the US.
Sales and Marketing
Coty's products are sold in retail stores, from drug stores to prestige boutiques, as well as through hair and nail salons and travel retail sales channels such as duty-free shops, airlines, cruise ships, and other tax-free zones. The company also has an e-commerce presence, which accounts for about 10% of revenue. Its top retailer, Walmart, accounts for about 5% of total revenue.
The company has dedicated sales and marketing teams in most of its major markets and seeks to attract customers via traditional media, in-store and in-salon displays, digital and social media, and collaborations, product placements, and events. Celebrity endorsers are also key for Coty; recent ad campaigns have included Lupita Nyong'o, Kate Moss, Jake Gyllenhaal, Gwen Stefani, and Jared Leto.
Advertising and promotional costs for fiscal years 2018, 2017, and 2016 were $2.2 billion, $1.9 billion and nearly $1 billion, respectively.
Acquisitions have driven Coty's strong growth over the past five years with revenue more than doubling since fiscal 2014. Net income has been less consistent with losses in three of the last five years.
In fiscal 2018 (ended June 2018), the company reported revenue of $9.4 billion, up nearly 25% from the prior year. The increase was driven almost entirely by acquisitions, including the Procter & Gamble Beauty Business, the Burberry Beauty Business, and others. Without acquisitions, its revenue rose 4% on positive impacts from pricing and foreign currency exchange translations.
Coty had a net loss that year of nearly $170 million, an improvement from a loss of about $420 million in fiscal 2017. The company has net profit margins that hover in the low single digits.
Cash at the end of fiscal 2018 was $362 million, a decrease of $208 million from the prior year. Cash from operations contributed $414 million to the coffers, while investing activities used $688 million, mainly for capital expenditures. Financing activities added $69 million as proceeds from loans slightly outweighed repayments.
Coty's growth strategy is focused around the areas of core brands and innovation, digital transformation, and emerging market expansion.
The company is putting its energy and investment dollars behind its strongest brands, which include some of the world's most recognizable beauty names (CoverGirl, Clairol, Gucci, Calvin Klein, Burberry), as well as the smaller brands positioned for growth (Bourjois, Younique, Chloe). In addition to relaunches of select brands (including the opening of a CoverGirl flagship store), it has discarded about a dozen brands (GUESS, Cerruti, Playboy) as part of a portfolio rationalization. With core brands as the foundation, Coty is introducing new fragrance products such as Gucci Bloom, Gucci Guilty, and Chloe Nomade as part of its innovation initiative. The focus on stabilizing core brands is especially critical for its consumer beauty business, which, excluding the impact of acquisitions, has been on the decline.
On the digital transformation front, the company is investing in talent acquisition, data and product management systems, and in-house content creation capabilities as it works to grow e-commerce capabilities. Online sales rose 50% in fiscal 2018 to 10% of total revenue (excluding Younique, which is an e-commerce-only business). Coty launched a digital accelerator program in mid-2018 that allows tech start-ups to present at quarterly summits and earn the opportunity to work with Coty's vendor brands. It also introduced a personal beauty assistant app for the Amazon Echo that year.
Lastly, growth in emerging markets in Latin America and Asia particularly are key to Coty's strategy. An acquisition moved the company into Brazil, where it continues to gain market share. Although currently a small market for Coty, China is a major focus. In 2018 the company had a successful launch of the Tiffany brand in China, where it also has a business partnership with Asian e-commerce giant Alibaba. Mexico and Middle East are also target markets.
Mergers and Acquisitions
Coty has kickstarted revenue, added new product categories, and moved into new geographies through major acquisitions over the past several years.
In 2017 it bought a majority stake in privately held Younique, a peer-to-peer online cosmetics retailer, for about $600 million. The move accelerates the company's e-commerce operations, moves it into social selling, and broadens its appeal to younger consumers. It also acquired that year long-term global licensing rights for Burberry fragrances, cosmetics, and skincare, which will enhance its luxury segment.
In a pivotal year for Coty, in 2016 it acquired premium hair-care brand ghd (Good Hair Day) for about $510 million. Also that year it purchased Procter & Gamble Company's Specialty Beauty Business and the beauty business of Hypermarcas S.A.
The P&G deal included the CoverGirl and Max Factor cosmetics brands and the Hugo Boss and Gucci fragrance brands. Valued at a hefty $11.4 billion, the move bolstered Coty's market presence as a beauty products company, ranking it third behind LOréal and Unilever. Its geographic presence was also significantly expanded. The Hypermarcas business, bought for about $1 billion, provided Coty with a critical mass platform in the Brazilian beauty market. Its leading brands include Monange, Risqué, Bozzano, Paixão, and Biocolor.
Coty was founded in Paris in 1904 after François Coty created his first perfume, La Rose Jacqueminot.
11050 YORK RD
Hunt Valley, MD 21030-2098
Phone: 1 (410) 785-7300
Employer Type: Privately Owned
Purchasing: Joe Hill
Quality Assurance Technician: Kelly Ruby
Employees (This Location): 1,500
Employees (All Locations): 1,509
Hunt Valley, MD
Hunt Valley, MD