What You Should Know About Coty’s Plans To Sell Its Professional Beauty Brands

Professional beauty brands including Wella Professionals, OPI and ghd may no longer be a part of Coty in the near future—but that shouldn’t worry professional hairdressers.

Parent company Coty announced this month it would be focusing more on fragrance, cosmetics and skin care and is exploring the sale of the pro beauty business unit to pare down its brand portfolio and pay down debt. Selling the pro side of the business—as well as the company’s Brazilian operations—would help return excess cash to shareholders. The pro beauty unit and Brazilian business are expected to generate $2.7 billion in net sales this year.

Coty’s professional beauty business, which also includes brands Clairol, System Professional, NIOXIN, Sebastian Professional, Sassoon Professional, Kadus Professional and Londa Professional, is globally #2 in the pro beauty industry, the company notes. Hairdressers, nail techs and other pro beauty industry members should know that the day-to-day operations of the Professional Beauty Division and its brands will not be affected following the announcement—partly because the pro beauty division is operationally distinct, with a standalone business structure and its own management, led by Sylvie Moreau, President of Global Coty Profession Beauty.

“Over the past three years with Coty, we have managed to consolidate our business and position ourselves on strong foundations for further growth. I am proud of what we have accomplished and I am honored to continue to lead this business,” says Sylvie, who has led the division since these brands were acquired from Procter & Gamble in 2016.

Sennen Pamich, who joined Coty as the Senior Vice President of the Professional Beauty Division in North America last year, says the division will remain focused on serving its customers with excellence and looks forward to taking its partners—250,000+ hair and nail salons in more than 100 countries—to the next level. He notes the announcement will not impact the continuity of the Professional Division’s work and the collaboration with its customers and partners. “Coty Professional North America will remain committed to deliver the highest quality services and products for the hair and nail professional industry,” Sennen says.

The news comes at an exciting time for Wella Professionals—in 2020, the company will celebrate its 140th anniversary. This longtime legacy brand “has only been possible with the true partnership of many people…and we’re ready to make the next chapter with Wella, and our partners, a success story for many years to come,” said Randall Chinchilla, VP Influencer Marketing and Corporate Affairs, Coty Professional Beauty. “We’ll remain completely committed to supporting hairdressers and their salons and bringing innovation that better meets their clients’ needs and that supports the growth of our industry.”

In early July, Coty announced a plan to turn around its performance. The potential sale of the pro beauty unit “accelerates this transformation and will help reposition Coty as a more focused and agile company, deleverage our balance sheet, and improve our ability to invest in areas with the greatest growth potential,” says Pierre Laubies, Chief Executive Officer of Coty. “The Professional Beauty teams have done an incredible job over the past three years in creating a strong business platform, putting us in the favorable position to find the best owner for that business while unlocking significant value for Coty shareholders and allowing us to further grow our core remaining businesses.”

Coty’s Board tapped Credit Suisse to assist with the strategic review of the professional beauty unit and associated hair brands, as well as Coty Brazil, and anticipates the process to be finished by summer 2020. At that time, the company is expected to focus more on its luxury unit’s portfolio of licenses, including Gucci, Burberry, Hugo Boss and Calvin Klein, its cosmetics business, including Rimmel and Sally Hansen, and its skin care brands, including philosophy.