Coty Considers Breaking Up Business Amid Sale Talks and Internal Pressures
Coty Reportedly Exploring Strategic Sale of Luxury and Mass-Market Divisions
Global beauty conglomerate Coty is said to be considering a strategic breakup of its operations, potentially leading to the sale of both its luxury and mass-market segments in separate transactions. According to reports from U.S. media, including WWD, early discussions have already begun with key industry players such as Interparfums and Kering.The two-step divestiture strategy reflects current market challenges, as finding a single buyer for Coty’s diverse portfolio appears increasingly difficult. The potential sale comes at a critical time, with the company experiencing declining revenues, internal tensions, and ongoing shareholder pressure.
Luxury Division May Go First: Gucci and Burberry in Focus
Sources suggest Coty’s luxury division could be the first to leave the group’s portfolio. This unit includes prestigious licenses such as Gucci Beauty, Burberry, Hugo Boss, and Jil Sander. Interparfums has reportedly expressed interest, particularly in reclaiming the Burberry license, which it managed until 2013.Gucci remains one of Coty's most valuable beauty assets, but its long-term future is uncertain. The license, signed for 50 years, is set to expire in 2028. Many analysts believe Kering — Gucci’s parent company — will take back control, especially after launching Kering Beauté in 2023 following its €3.5 billion acquisition of Creed.
The potential transaction could unfold as a strategic alliance or joint venture, rather than a straightforward sale, according to insiders.
Challenges Loom Over Consumer Brands
While the luxury segment continues to draw buyer interest, Coty’s mass-market division faces more skepticism. Brands like Covergirl, Max Factor, and Rimmel London are reportedly struggling, with net sales in this segment falling 9% in the third fiscal quarter.Coty has made attempts to reposition these brands, particularly in the Asian market, but geopolitical tensions and the U.S.–China trade dispute have hindered progress. Some experts believe this division may only attract interest from private equity firms, rather than strategic buyers.
The company is also still seeking to divest its remaining 3.6% stake in Wella, after a failed exit attempt in 2023.
Leadership in Question as Performance Stumbles
The potential breakup of Coty comes amid growing leadership uncertainty. CEO Sue Nabi, who took the helm in 2020 and is known for her previous roles at L’Oréal and as founder of Orveda, may exit the company as early as this summer.Although she led a major repositioning strategy for Coty, Nabi's tenure has been marred by unsuccessful deals — most notably the $200 million investment in Kim Kardashian’s Skkn by Kim brand, which ended in a $71 million write-off. Similarly, Kylie Cosmetics underperformed, although its fragrance segment showed promise.
Stock Market and Strategy Pressures Mount
Coty’s current market position paints a stark picture. The company’s stock has plunged 30.7% so far in 2025, underperforming key competitors like L’Oréal (up 9.9%) and Estée Lauder (down 2.4%). Coty’s market capitalization has dropped to around $4.13 billion.Its fiscal third-quarter revenue declined 6% to $1.29 billion, falling short of analyst forecasts. Amid these pressures, a phased sale strategy is seen as the best route forward, avoiding antitrust concerns that might arise with a single buyer and maximizing value by appealing to separate market segments.
