A little over six months after the appointment of CEO Sue Y. Nabi, US-based Coty is looking to ramp up its luxury fragrances business and become a key player in prestige make-up as part of a new growth acceleration strategy.
Luxury and China are set to be key areas of focus for beauty group Coty, which has unveiled plans to accelerate its luxury business via its fragrance portfolio, as well as developing in the areas of skincare and prestige cosmetics through its Gucci and Burberry brands
In luxury fragrance, Coty says that it is now focusing on “iconic female franchises” and expanding into what it calls artisanal fragrances, as illustrated by Gucci’s The Alchemist’s Garden and Chloé’s Atelier des Fleurs. It will also build a skincare portfolio across prestige and mass, tapping into key trends like regenerative medicine, dermatology-led solutions, clean beauty and Gen-Z brands.
“We anticipate a rebound in demand for beauty products as pandemic restrictions ease, led by luxury beauty, clean beauty, China and skincare,” said Coty CEO Sue Y. Nabi in a statement.
The group is also looking to develop in China, which currently represents 3% of its sales. For this, is it banking on its Prestige and certain Consumer Beauty brands, and is aiming for China to account for 10% of its sales by fiscal year 2025.
Coty plans to ramp up its e-commerce and Direct To Consumer (DTC) growth. E-commerce, which accounted for 19% of its sales in the second quarter of 2021, saw growth of 40% during the period, in part driven by its Prestige business.
Lastly, sustainability is also a key focus for the group: thanks to its new ‘Beauty That Lasts’ index, sustainability criteria is integrated into the packaging and formula development of each new launch. And through its partnership with LanzaTech, Coty plans to use carbon-captured ethanol in its scents across the majority of its fragrance portfolio in 2023.
In the first half of 2021, Prestige fragrances accounted for 52% of Coty’s sales, while Prestige skincare totaled 6% and Prestige cosmetics 3%. By fiscal year 2025, Coty is aiming for Prestige skincare to account for more than 10%, and for Prestige cosmetics, a “high-single digit percentage” of revenue.