Imagine a beauty giant, once a powerhouse in the industry, now struggling to regain its footing after a series of missteps and questionable decisions. This is the story of Coty, a company that went from a triumphant public debut to a battle for survival in just over a decade.
When Coty went public in 2013, its initial public offering (IPO) was one of the largest for a consumer products company at the time, with shares priced at $17.50. Fast forward to today, and the company’s stock has plummeted to a mere $2.51, battered by a series of ill-fated business moves, constant leadership churn, and a multibillion-dollar acquisition that failed to deliver. But here's where it gets controversial: Was this downfall inevitable, or could it have been avoided with better strategic choices?
All eyes are now on Markus Strobel, the former Procter & Gamble executive who took the helm as Coty’s executive chairman and interim CEO in January 2024. Strobel replaced Sue Nabi, a former L’Oréal executive whose tenure started strong but quickly unraveled. Nabi’s time at Coty was marked by a staggering pay package—an estimated $463.7 million over five years—and a series of decisions that left the company in a precarious position. And this is the part most people miss: While Nabi’s leadership was criticized, the seeds of Coty’s struggles were sown long before her arrival.
In his first earnings call, Strobel was candid about the challenges ahead, unveiling a turnaround plan dubbed “Coty Curated.” The strategy focuses on sharper priorities, targeted investments, improved execution, and increased support for core businesses. Strobel emphasized transparency and a commitment to consumer demand, stating, “We will be transparent about what works and what does not. We’re going to set balanced near- and long-term targets and concentrate our resources where they matter most.”
But can Strobel deliver? Analysts remain skeptical, pointing to Coty’s history of missed opportunities and strategic missteps. Barclays analyst Lauren Lieberman noted, “For the better part of the past 2+ years, it has felt like the company was so out of touch with its challenges.” Robert Ottenstein of Evercore added, “The central debate around Coty is whether operational efficiencies can coexist with the creativity and speed required to compete in the beauty market.”
Here’s the bold question: Can Coty truly reinvent itself, or is it too late to reclaim its former glory? The company’s struggles began in 2016 with its $11.6 billion acquisition of 41 beauty brands from Procter & Gamble, including CoverGirl and Max Factor. The deal, engineered by then-interim CEO Bart Becht, saddled Coty with $1.9 billion in debt and a portfolio of declining brands. Controversially, some argue that Coty should never have pursued this acquisition, given the poor state of many of the brands involved.
The integration of these brands was far from smooth. Cultural clashes between Coty and P&G, coupled with low investments during the transition, further exacerbated the challenges. Industry insiders point to Becht’s leadership as a critical misstep. “He tried to commoditize beauty, and that was the death knell,” said one source. “He got rid of the people who created the company’s success and brought in executives from Reckitt Benckiser, creating a cultural disconnect.”
Sue Nabi’s tenure, while marked by some marketing wins, was also criticized for her focus on niche projects like Orveda, a prestige skincare brand she co-founded. Coty invested heavily in Orveda, opening freestanding stores in prime locations, but the brand generated only $5 million in sales in 2024. Is this a case of misplaced priorities, or was Nabi simply trying to innovate in a crowded market?
Adding to Coty’s woes is the loss of its Gucci license to L’Oréal, a move that analysts describe as both a short-term perception hit and a long-term revenue blow. Meanwhile, the company’s revolving door of CEOs—eight since 2010—has left investors craving stability. Susan Anderson of Canaccord Genuity noted, “Investors need certainty, which an interim CEO does not necessarily provide.”
Despite these challenges, there are glimmers of hope. Coty’s fragrance business remains strong, and the company has more cash for investment after selling its stake in Wella. Strobel’s turnaround plan is in motion, but success will depend on execution and time. The real question is: Can Coty move fast enough to outpace its competitors and regain investor confidence?
As the beauty industry continues to evolve, Coty’s story serves as a cautionary tale about the risks of overambitious acquisitions, leadership instability, and strategic misalignment. Will Strobel’s leadership mark a new chapter of revival, or will Coty remain mired in its struggles? Only time will tell. What do you think? Can Coty rise from the ashes, or is its decline irreversible? Share your thoughts in the comments below.
