THE BEAUTY REPORT: P&G


Chapter closes on P&G Prestige A


s has been extensively reported by TRBusiness, Coty Inc has just completed


a multi-billion deal with Procter & Gamble to take on 41 of its beauty and fragrance brands, making the already very powerful Coty a force to be reckoned with in DF&TR. P&G also sold its Dolce&Gabbana


beauty licence – with a turnover of around €400m/$440m in 2015 – in October 2016, to Japanese giant, Shiseido Group. Fashion house, Dolce&Gabbana,


and Shiseido announced their worldwide license agreement in July last year – although it had been known since at least January that the Italian brand was seeking a new beauty partner. At the time, Coty, who lost out


on these two licences, made this statement: “The licensors of the Dolce&Gabbana and Christina Aguilera Perfumes licenses did not provide their consent within the specified timetable, and in accordance with (our) transaction agreement and in the interest of staying on track with the transaction, it was agreed that these brands will not transfer upon completion of the merger.” P&G Beauty built up a very


successful fragrance business for Dolce&Gabbana, but with the Shiseido deal the fashion house sees new opportunities in skincare and make-up. For its part, Coty charges on with


its new portfolio which seems to have endless possibilities as the company’s Senior Vice President of Global Travel Retail, Philippe Marguerite told TRBusiness in an exclusive interview (see p54). “In the case of travel retail we


are combining different capabilities and the best of both companies’ legacy,” he said. “Some of P&G strengths were


its first-class consumer insight capabilities and advanced in-store


JUNE 2017


Following a game-changing deal to transfer 41 brands to Coty Inc, it is officially the end of an era for P&G Prestige, previously one of the world’s best-performing luxury beauty houses in DF&TR, as Charlotte Turner reports.


Shiseido has big plans for Dolce & Gabbana in travel retail; particularly with its colour cosmetics range.


solutions, while Coty was known for its creativity and agility in the market. I think both positive elements are leveraging each other and this is a critical competitive advantage for us today. Before P&G Prestige merged with


Coty and sold off D&G to Shiseido, the company was an undeniable powerhouse in duty free and travel retail, as is evident by its 2015 sales ranking (fourth) and its Advantage ranking (fifth). [See p41 and 43 for more details on both rankings and metrics used].


Where it all began... As is well known, P&G’s heritage stretches back to 1837 where in Cincinnatti William Procter (emigrating from England) established himself as a candle maker and James Gamble (an immigrant from Ireland) was a soap maker. They might never have met had


they not married sisters – Olivia and Elizabeth Norris – whose father, Alexander Norris pointed out that his two new sons-in- law were competing for the same raw materials. He suggested they become business partners and what began as


a family-run candle and soap business would eventually grow into one of the largest consumer goods companies in the world. In 2014 P&G’s ‘prestige fragrances’


alone were generating an estimated $2.5bn in sales a year – accounting for more than 10% of the company’s total beauty unit revenue. At the time, Prestige brands claimed it had tripled sales and quadrupled profits since 2000. According to fiscal 2014 sales (ending


results


June), P&G Beauty registered total revenue of $5.9bn, which together with Coty’s existing portfolio worth sees the creation of a $9bn-plus beauty giant. «


Before P&G Prestige merged with Coty and sold off D&G to Shiseido, the company was an undeniable powerhouse in duty free and travel retail as is evident by its 2015 sales ranking (fourth) and its Advantage ranking (fifth).


TRBusiness TRBUSINESS 51


Below: Coty recently conducted a major launch for Gucci - formerly belonging to P&G’s portfolio - with new scent, Bloom.


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