Coty’s share price has shot up following a new report that the Rimmel and CoverGirl owner is potentially exploring a sale.
Shares in the beauty giant jumped as much as 7% on the New York Stock Exchange (NYSE).
The company has a dual listing and shares on the Paris Stock Exchange were also up by 3% in early trading on Tuesday morning.
A report by WWD alleges the company is in the early stage talks of a sale, citing multiple industry sources.
A Coty spokesperson told Cosmetics Business that the company “does not comment on rumour speculation”.
The report speculates that the potential sale could come in two parts, hiving off its luxury division and mass consumer brands separately.
Coty Luxury includes fragrance brands such as Gucci, Burberry, Davidoff and Kylie Cosmetics.
In addition to Rimmel and Cover Girl, Coty’s consumer brands include Max Factor, Bourjois, Sally Hansen, Adidas and David Beckham fragrances.
Coty holds the licensing for fragrance and beauty for a number of luxury brands.
It has held the licence for Gucci fragrance and beauty for nearly 50 years, and Coty CEO Sue Nabi said in 2023 that there would be no discussion with owner Kering before 2028.
Kering has since created its own beauty division, Kering Beauté, to develop new lines for its brands such as Bottega Veneta, Balenciaga, Alexander McQueen.
Coty boosted its fashion fragrance business last year however, after signing new deals with Marni and Etro, and the latter will run “beyond 2040”.
Marc Jacobs beauty is also making a return after inking a deal with Coty in 2023.
Hugo Boss and Coty extended its agreement 2023 beyond 2035.
At the time the company said that it had no other sizable licence renewals in the next six years, and that the average remaining duration of the company’s top six licences was approximately ten years.
Burberry and Coty signed a fresh licensing agreement in 2017, but an end date to the “long term” deal was not disclosed.
Coty’s prestige fragrance sales grew in the three months to 31 March this year, but moderated to a single-digit pace, according to its most recent financial results.
Overall, net revenue at the US beauty giant fell 6% to $1.29bn in the three months to 31 March due to “an uncertain market backdrop” and a 3% headwind from foreign exchange costs.
Consumer beauty, where it has seen diverging market trends between cosmetics and fragrance, declined 9% to $469.7m.
Coty’s prestige division, which includes brands such as Lancaster and Philosophy, saw sales fall 4% to $829.4m as it absorbs a “tripleheadwind” of a slowing fragrance market, “blockbuster innovation” last year and “depleting elevated retailer inventory”, especially in the US.