Coty and Burberry join forces in luxury beauty and fragrance

 

In an announcement sure to shake up the P&C industry, Coty Inc. has announced that it has entered into an agreement to acquire the exclusive long-term global license rights for Burberry Beauty luxury fragrances, cosmetics and skincare. Under the new agreement, Coty will develop, manufacture and distribute the full range of Burberry Beauty products globally.

The deal, which is subject to customary regulatory approvals, is expected to close during Q4 of this year, when Coty will buy from Burberry approximately £50 million (currently approximately US$62.2 million) in inventory. Coty will pay a cash consideration of £130M (approximately US$162 million) for the long-term exclusive global license. In FY 2015/16 Burberry Beauty revenue was £203M, as disclosed in Burberry’s annual results.

The two companies will work as partners on creative executions, leveraging Burberry’s luxury pedigree and Coty’s global capabilities in beauty strategy, innovation, supply-chain and go-to-market. Burberry beauty products will be sold in leading luxury beauty retailers globally as well as in Burberry stores and digital channels.

Coty’s Luxury division will manage the Burberry Beauty division. Headquartered in Paris, Coty Luxury develops, produces, markets and distributes globally a range of fashion house fragrances including Gucci, Marc Jacobs, Hugo Boss, Calvin Klein, Alexander McQueen, Bottega Veneta and Balenciaga, as well as premium cosmetics and skin care under the philosophy, Lancaster and Gucci brands.

Coty’s CEO Camillo Pane suggests the strategic partnership, combining Burberry’s British heritage of innovation, craftsmanship and design with Coty’s expertise and leadership in luxury beauty products. “We are proud to welcome Burberry as a strategic partner of Coty. We look forward to growing further Burberry’s luxury beauty products using Coty’s world-class expertise in developing and bringing to market beauty brands.”

Edgar Huber, President Coty Luxury, added, “Burberry is an iconic luxury brand. It fits perfectly with Coty Luxury’s portfolio, which includes contemporary and globally relevant prestige beauty brands. We are uniquely positioned to develop Burberry Beauty to the next level. This is another significant step in building Coty’s Luxury division.”

Commenting on the strategic partnership, Christopher Bailey, Chief Creative and Chief Executive Officer, Burberry, said, “We are delighted to partner with Coty, a world leader in luxury fragrance and make-up. Working with a global partner of Coty’s scale and expertise will help drive the next phase of Burberry Beauty’s development and position this business for growth.”