Coty changes CEO again, hires former L’Oreal executive to revive sales
July 2, 2020
By Nivedita Balu and Praveen Paramasivam
(Reuters) – Coty Inc <COTY.N> on Thursday named former L’Oreal executive Sue Nabi as its chief executive officer, its fifth since the cosmetic maker’s multi-billon dollar deal with Procter & Gamble <PG.N> nearly five years ago.
The company’s shares, which have lost more than 60% so far this year, rose about 4% before the bell.
Nabi will take over from Peter Harf who was appointed to the top job in June, a move that placed the fortunes of the company squarely in the hands of its largest shareholder JAB Holdings, in which Harf is a partner.
Harf was brought in to rescue the company from a series of CEO departures after years of slowing sales and mounting debt as it struggled to integrate the brands acquired from Procter & Gamble.
“This was unexpected… We thought Harf would stay,” D.A. Davidson analyst Linda Bolton Weiser said.
Harf will remain with Coty as its executive chairman and Nabi, the company’s first woman CEO, will take over on Sept. 1, the company said.
Nabi, who has been credited for reviving L’Oreal’s makeup brand Lancome, faces an uphill task of rescuing Coty’s sales and steering it through the coronavirus crisis.
She is also the founder of a vegan and ultra-luxury skincare brand, a category where Coty is trying to focus.
“The most important takeaway is that Nabi brings a lengthy Beauty background, something that has been lacking with prior CEOs,” Wells Fargo analyst Joe Lachky said.
The company has been trying to sell businesses and partner with brands endorsed by celebrities with a huge social media following to make its products resonate better with millennial customers.
It recently injected money into trending brands, including those of TV stars Kim Kardashian West and Kylie Jenner, to expand the brands’ skincare products’ reach globally.
(Reporting by Praveen Paramasivam and Nivedita Balu in Bengaluru; Writing by Sweta Singh; Editing by Arun Koyyur)