Coty Reportedly Exploring Break-Up Sale of Luxury and Consumer Divisions

THE WHAT? Coty Inc. is reportedly exploring a potential sale of its business in parts, according to multiple industry sources, with early discussions said to involve divesting both its Luxury and Consumer beauty divisions.

THE DETAILS Sources told WWD that Coty may pursue a two-part sale, separating its prestige fragrance and beauty brands—including Gucci, Burberry, Hugo Boss, and Jil Sander—from its mass-market portfolio, which includes Covergirl, Rimmel London, and Max Factor. Talks are said to be at an early stage, with Interparfums reportedly in discussions to acquire select fragrance licenses, particularly Burberry and Hugo Boss. Gucci’s beauty license is expected to revert to parent company Kering when it expires around 2028.

Coty’s Consumer division has faced continued softness, with net revenue down 9% in Q3 of fiscal 2025. Sources cited difficulty in finding buyers for the mass segment, particularly amid slower growth in Asia and valuation concerns. A full-group sale is considered unlikely due to antitrust implications.

Coty has also offloaded its stake in SKKN by Kim and is attempting to divest its remaining 3.6% in Wella. Uncertainty also surrounds CEO Sue Nabi’s tenure, amid wider strategic shifts and investor changes. Coty’s market cap currently stands at US$4.13 billion, with its stock down over 30% year-to-date.

THE WHY? The potential sell-off reflects mounting financial and structural pressures. Coty has underperformed against sector peers and is facing license expirations, revenue declines, and underwhelming returns from recent celebrity brand investments. The separation of its Luxury and Consumer businesses could allow buyers to acquire targeted assets while enabling Coty to divest from underperforming categories.

Source: WWD

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