Coty said on Tuesday it had launched a strategic review of its consumer beauty business that could lead to the sale of brands such as CoverGirl and Rimmel, as the cosmetics maker plans to focus on its more profitable fragrances unit.
Reuters
The New York-based company had last month projected a quarterly sales decline as demand for its beauty products softened.
The firm invested heavily into its U.S. mass beauty business at the expense of fragrance, before shifting course as mass beauty struggled with rising competition from lower‑cost online rivals.
The move comes as the U.S. mass-market makeup segment faces pressure, with drugstores destocking products as cost-conscious consumers tighten spending and fierce competition from newer brands building a strong following online.
Anti-theft measures by U.S. retailers and recent changes in immigration policies have also hurt demand in the mass beauty category, company executives have said.
More than a decade ago, Coty paid $12.5 billion for some of these brands in a deal with Procter & Gamble.
“This new structure will… drive renewed momentum and sharper focus for consumer beauty, positioning it to compete more effectively in the evolving beauty landscape,” CEO Sue Nabi said, adding she aims to grow Coty’s prestige portfolio through blockbuster launches and brand elevation.
In 2024, the prestige fragrance market was the fastest growing category, up 12%, according to data firm Circana, while the mass-market makeup category declined 3% compared to 2023.
In the first half of 2025, prestige fragrance sales are up 6% in the U.S., the data showed.
“Coty is signaling it’s done playing drugstore beauty pageant and wants to sit exclusively at the prestige beauty table with LVMH and Estée Lauder as dinner companions, not competitors,” said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors.
Coty said its review would focus on its $1.2 billion revenue mass color cosmetics segment, which includes brands such as CoverGirl, Rimmel, Sally Hansen and Max Factor, as well as its $400 million standalone Brazil business.
“The review will assess a full range of alternatives including partnerships, divestitures, spin-offs and other potential strategic actions,” Coty said, adding that the aim was to bolster its balance sheet.
Coty’s consumer beauty division, which contributed $2.07 billion to annual sales, saw like-for-like sales drop 5% year-on-year for the 12 months ending June 30, it said last month. In the same period, its ultra-premium, prestige and consumer beauty fragrances grew between 2% and 9%.
Reduced profit has eaten into Coty’s free cash flow, which totaled $277.7 million for the year to June 30, while the company’s total debt was just over $4 billion.
Coty’s previous efforts saw it bring together hair and nail brands into professional beauty business Wella and sell a majority to stake to KKR.
Coty is still working to divest its remaining 26% stake in that business. Coty will bring all fragrance and scent brands under one business unit accounting for 69% of company sales, while aiming to maintain steady growth in cosmetics and skincare.
Shares of the company, which have lost nearly half of their value this year, were up nearly 3% in early trading on Tuesday.
Coty, which licences the fragrance brands of Gucci, Chloe and Burberry, has a market capitalization of about $3 billion, according to LSEG data.
The news was first reported by the Wall Street Journal earlier on Tuesday.
With fashion weeks having kicked off in earnest this month, the world’s top buyers are gathering their thoughts about what they expect affluent shoppers to snap up come AW26 collections arriving in-store and Simon Longland, director of fashion buying at London’s Harrods, is among them.
Just back from the Milan menswear shows, he highlighted the importance of timeless fashion.
“Milan menswear has always lived between two opposing forces: Fashion with a capital ‘F’, and quiet luxury rooted in sartorial tradition and timelessness,” he explained.
“This season, more than ever, the balance of the schedule leaned firmly towards the latter. The result was a Milan season defined by quality, cut, cloth and craft. There was a palpable sense that product integrity and the final customer were front and centre. Less noise, fewer theatrics—but a stronger, more coherent message around what modern luxury menswear looks like today: thoughtful, considered, and built to last.”
He hailed big names including Polo’s Purple Label, Zegna, Prada, Brioni and Dunhill both for the impact of the shows or presentations and the looks they included.
“This season, the strongest ‘shows’ were the ones that felt complete: a clear point of view, real product conviction, and a wardrobe that moves the customer forward,” he said. “Ralph Lauren’s return to Milan brought scale and theatre, but crucially it was backed by wearable, elevated classics that translate beautifully across Polo through Purple Label.
“Zegna delivered that modern luxury sweet spot—quiet confidence, investment dressing, and a proposition built on longevity and wardrobe building rather than novelty.
“And Prada was Prada in the best way: intellectually sharp, slightly disruptive, and refreshingly anti-‘power uniform’—a collection that challenged the idea of what contemporary menswear authority looks like.
Longland thought the best presentation was Brioni “because it understood the moment: craftsmanship, ease, and a sense of journey—luxury that doesn’t shout, it lasts”.
But he also liked Dunhill, calling it “a masterclass in mood and restraint—an incredibly precise take on British elegance, with the kind of tonal sophistication that customers immediately understand”.
As for the season’s top trends so far. In tailoring, he noted “a confident split: either slouchy, relaxed tailoring (softened shoulders, easier proportions), or clean, slim, sharply tailored lines for the customer who wants refinement without volume. Prada and the broader conversation around modern tailoring really underlined this shift”.
He also thought co-ords and tonal dressing were significant with “head-to-toe dressing in shades of one colour now a key styling language—particularly in neutrals and ‘quiet’ hues. It reads modern, premium, and effortless”.
Colour-wise, Longland called out the colours of nature: greens, greys, browns—earthy, mineral, and outdoors-referenced tones “that feel calm, grounded, and timeless”.
And as for materials, leather nd suede were crucial and could be found “everywhere in a more refined register—often softer, more tactile, and less overtly aggressive. It’s about texture, depth and longevity rather than statement”.
On the key item front, Longland’s backing bomber jackets that have “continued to evolve—less ‘street’, more luxury wardrobe essential: cleaner finishes, elevated fabrics, and styling that works over tailoring as easily as with casual trousers”.
And he sees a jacket or coat in “beautifully supple suede, ideally in chocolate brown or charcoal” as a “must-have” for the season. Why? “It perfectly encapsulates the season’s mood—luxurious yet understated, timeless yet modern, and endlessly versatile within a contemporary wardrobe”.
The Who’s Next trade show, held in Hall 7 of the Parc des Expositions (Paris XV) from January 17 to 19, put accessory brands centre stage. Eyewear, jewellery of every kind, bags, mittens, and headwear – buyers were spoilt for choice. Among these brands, a few caught the eye of FashionNetwork.com.
Italian Okkia and its affordable eyewear
Founded in 2016, this Italian brand specializes in affordable eyewear. – Okkia
Founded in 2016, Okkia is an Italian brand offering affordable eyewear, from prescription frames to sunglasses. It is exhibiting at Who’s Next for the first time, with ambitious international plans. Its attractive pricing — €25 for prescription glasses, €27 for sunglasses and €40 for both — helped it sell one million units in 2025. Already widely distributed across Europe, the brand is also present in the United States, several Latin American countries, Turkey and the Maldives. It now aims to establish itself in countries such as Australia, where it is not yet present, and to strengthen its global footprint. This year will see the launch of two new lines for Okkia, as well as a collaboration with Italian designer Seletti.
Lumielle Aurora 1896 holds umbrella licences for a number of brands, including Agnès b. – Lumielle Aurora 1896
Japanese premium umbrella brand Lumielle Aurora 1896 marked its second appearance at the show, having made its debut last September. The brand is seeking a foothold in European stores — a strategy only recently set in motion — but is, for now, hampered by its pricing. Made in Japan from textiles produced in-house in the Niigata region, these umbrellas, with wooden or bamboo handles, have so far found limited traction in Europe. Lumielle Aurora 1896 has, therefore, developed a more affordable line, presented at the show alongside parasols for hot weather. Aurora has also owned Tokyo Hat since 2007, a brand of caps and other headwear featured across several stands. With a more contemporary offer, Tokyo Hat hopes to win over retailers with a younger clientele and a taste for creative fashion.
The timeless Le Béret Français and Le Bonnet Français
Le Béret Français regularly benefits from French lifestyle trends – Le Béret Français
Le Béret Français and its recently acquired subsidiary, Le Bonnet Français, were also in attendance this January. Le Béret Français, which holds the Entreprise du Patrimoine Vivant (EPV) label, aims to maintain its positive growth trajectory, particularly buoyed in recent years by the Rugby World Cup in France and the Paris 2024 Olympic and Paralympic Games. With €1 million in annual sales, the company nevertheless faces strong competition from other brands, whose product quality is not always on a par with its own, made in Bayonne from French wool. Even so, Le Béret Français can boast sales to a wide range of partners, including department stores, milliners and even museums, whose end consumers are very diverse.
Who’s Next also boasted a broad line-up of exhibitors, including Naked Wolfe and its colourful shoes, Zen Collective and its Buddhist bracelets, and Hinterveld and its thick mohair scarves.
A year-and-a-half after his fellow co-founder, Max Svärdh, stepped back, Albin Johansson is now doing the same at Axel Arigato, the label they founded together in 2014. In June 2024, the Swedish brand, renowned for its sneakers and chic streetwear, announced the appointment of Jens Werner as creative director, a role previously overseen by Max Svärdh.
Axel Arigato boutique – Axel Arigato
At that time, Johansson remained CEO of the brand, in which the investment firm Eurazeo took a majority stake in 2020. However, in early 2026, the company—which reportedly exceeded SEK 1 billion in turnover in 2024 (over €90 million)—appointed Frédéric Serrant to the role. He brings more than 16 years’ experience in international leadership roles across Asia and Latin America, gained at Adidas, the sports and lifestyle giant.
This expertise is expected to help Axel Arigato enter a new phase after years of expansion. The brand operates more than 15 standalone stores in major Scandinavian cities, as well as in key cities such as London, Paris, New York, Dubai and Berlin. It is also present in numerous department stores worldwide. However, this expansion has also eroded its margins, and the company has had to refine its strategy to limit operating losses.
“I am sincerely impressed by the remarkable work done so far to make Axel Arigato such a strong, distinctive and inspiring brand. It truly reflects the talent, passion and commitment of the teams, and I’m convinced that the brand’s potential is enormous. I look forward to joining the team, learning alongside them and writing the next chapters of the Axel Arigato story together,” commented Serrant, in a LinkedIn post.
Johansson will remain chairman of the board of directors.
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