Following Del acquisition, Coty lays out unification plan

WEST PALM BEACH, Fla. With the acquisition of Del Laboratories complete, Coty Inc. is now working to bring together the best practices of both companies and unify its sale force—moves that, along with continued product innovation, will help it achieve its goal of becoming a $5 billion global beauty company.

“Our goal is by July to come together as one united organization and take the best practices and best people of both organizations and really come together and leverage our synergies,” said Mary van Praag, senior vice president of sales, during a meeting with members of the media on Saturday at NACDS Annual. “From a customer perspective, we are going to have one unified sales force.”

As part of that move, Mike Ferrara, who is currently head of U.S. marketing for fragrance and personal care, will be moving to the sales side heading up fragrance and personal care for sales strategy and customer marketing. In addition, Bruce Kowalsky, who currently handles the sales operations and customer marketing for the Del Lab’s portfolio, will be vice president of sales, national accounts for all of Coty Beauty.

The Coty Beauty brand portfolio includes, but is not limited to, fragrances Celine Dion, David and Victoria Beckham, Shania Twain and Stetson, and cosmetics brand Rimmel. The deal enabled Coty to extend its portfolio offering, which, prior to the acquisition, made well over half of its sales (68 percent) in fragrance. Prior to the deal, color cosmetics accounted for 15 percent of Coty’s sales, while toiletries stood at 14 percent and skin care/sun care only at 3 percent of sales.

Through the acquisition, which closed Dec. 31, Coty Beauty’s portfolio has been bolstered with the addition of the Del Lab’s Sally Hansen, N.Y.C. New York Color and La Cross brands. Including the Del Lab acquisition, Coty’s annual net sales currently total $3.5 billion.

Having such brands makes Coty an even more powerful player in the beauty space and the momentum shows little signs of slowing as the company gears up for 2008/2009 launches, including fragrance. In fragrance, Coty currently holds a 30 percent share.

“Fragrance has been one of those categories that hasn’t seen a lot of growth from 2004 to 2007. What we are excited about though is that Coty has not only been the No. 1 player but we are on the right side of the growth track. In fact, in this year alone we contributed over 60 percent of the absolute dollar growth,” said van Praag.

Coty is looking to stay on the growth track with several major upcoming launches including a signature fragrance by actor and country music star Tim McGraw and a debut fragrance by actress Halle Berry.

In addition, the company will launch next spring a new brand from Stetson aimed at the younger male market.

Ferrara added that his No. 1 objective is improving the in-store environment and that the company is putting “significant resources” behind that initiative, including consumer insight research.

“You need some organization to the shelf and key purchase motivators are all about seeing and smelling the product,” said Ferrara. “Bottom line is we are going to make the environment more engaging and shoppable for her when she is in the store so she feels there is a reason to come over to beauty and, more importantly, when she is in beauty to think of it as a place to buy fragrance.”

While the initiative is in its early stages, the company is on the fast-track and Ferrara said they are already talking with some key customers about in-store tests, some of which could be seen for fall launches.

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