In mid-May, in Cannes, just a few days ahead of the city’s film festival, Coty gathered more than 100 beauty editors and celebrities from around the world for the no-expense-spared launch of a product and a concept that could define the future of the NYSE-listed company: a serum from the ultra-premium skincare brand Orveda, and Infiniment Coty Paris, a niche fragrance project.
Both are encapsulated within “Coty Protopia,” the company’s vision for “empowering bold and creative expressions of beauty.” The aim is to use cutting-edge innovation and science, and couple it with a commitment to sustainability.
“The future of beauty ... is one anchored in a deep respect for infinite expressions of individual beauty and experiences,” said Coty’s CEO Sue Y. Nabi, who has been instrumental in transforming the company since taking the helm in September 2020.
Nabi says that Orveda’s new Omnipotent Concentrate is perhaps “the most potent serum of all time”—a hefty claim—while Infiniment Coty Paris is described as “representing to fragrance what Orveda is to skincare.”
Orveda was Nabi’s own creation, co-founded in 2014 in London with businessman Nicolas Vu, who is now the brand’s CEO. The line was created a year after Nabi resigned from L’Oréal following a successful 20-year career ending as President of Lancôme, the core brand of L’Oréal’s luxury division.
Fast-Tracking Orveda
By November 2021, Nabi had brought Orveda into Coty’s portfolio, but no details of the investment size, or the skincare line’s revenue, were divulged. Nabi had divested her stake when she took the role of CEO at Coty.
Now Orveda—which has know-how in microbiome and prebiotics science—has been propelled into the driving seat of Coty’s strategy for conquering luxury skincare. Vu says that Omnipotent Concentrate “sits at the crossroads of scientific innovation in the areas of microbiome and cellular longevity.”
Meanwhile, Infiniment Coty Paris remains shrouded in mystery. The beauty giant calls it the company’s “most ambitious and most premium fragrance project to date” that will harness over a century of experience (Coty was founded in 1904) and leverage some top creative talent within beauty. The collection will ultimately include a range of 14 scents set to launch globally in 2024.
The industry has seen Chanel launch its top-end range Les Exclusifs, and Dior its Collection Privée Christian Dior. Coty might be looking at doing something similar. But will this strategy work? Coty is not Dior or Chanel. If anything, the house is best known for being highly diverse, with a wide mix of partner brands from Gucci and Calvin Klein to celebrities like Kylie Jenner, David Beckham, and Katy Perry. And its pricing is equally broad.
Could the company, instead, be considering a line of heritage scents under the Coty name itself by going back to the fragrance archives and reworking the creations of founder François Coty? Under Nabi’s guidance anything is possible, but whatever it is, it will be carefully considered.
Sticking to the Plan
After taking over as CEO in September 2020, Nabi wasted no time in starting a major revamp of Coty. She unveiled a comprehensive growth strategy just a few months later with a focus on the prestige end of the market with an agenda to lift both skincare and prestige fragrance.
Between the announcement (on July 2, 2020) of Nabi being named as Coty CEO to today, the company’s share price has more than doubled from $4.22 to $10.85. This is still way off the 2013 flotation price of $17.50.
Just before the Orveda launch in Cannes, Coty reported its Q3 FY23 results (ending March 31, 2023). They showed prestige beauty moving its share of the business up to 62% of Coty’s total sales, while consumer beauty shifted down to 38%. Respective revenue for each was $800 million (up 16% like for like) and $489 million (up 12% LFL).
The prestige segment also generated a reported operating income of $102.4 million in Q3 FY23, compared to $83.8 million in the prior year, whereas consumer beauty reported an operating loss of $27.9 million in the period, an increase from a loss of $20.4 million in the prior year.
Coty said that strategic investments into the skincare pillar would fuel its “growth
flywheel” in the coming years. To ensure that, on April 1, Coty appointed former EVP Global Premium Skincare, Caroline Andreotti, as Chief Commercial Officer for Prestige. Her brief is to strengthen Coty’s position in prestige fragrances, accelerate prestige makeup innovations, and push skincare growth in Asia and beyond.
