Bourjois-Coty deal under scrutiny

Bourjois has insufficient presence in emerging markets, according to Euromonitor

Bourjois has a strong retail presence in a number of countries worldwide

Make-up brand Bourjois has insufficient presence in emerging markets, said market analyst Euromonitor, following the news that Chanel is selling the brand to Coty.

However, the researcher adds, Coty could set up useful synergies between Bourjois and its existing brands to save on manufacturing costs.

“The purchase of Bourjois falls in line with Coty’s core strategy of high-speed expansion through acquisitions,” said Ildiko Szalai, beauty and personal care senior analyst at Euromonitor. “The integration of the brand adds a percentage point market value share to Coty’s colour cosmetics portfolio.”

However, the purchase does not offer strong expansion into dynamic emerging markets or skin care categories. Szalai said: “Over 55% of the brand’s sales are generated in western Europe, where colour cosmetics has a bleak outlook with less than 1% CAGR over the 2013-2018 period.” A growing proportion of the brand’s sales is generated in the Middle East and Africa, which is the most attractive region for colour cosmetics up to 2018, Szalai added.

Coty could build good operational synergies for Bourjois with its Rimmel and Astor brands to aid further geographic expansion and benefit from larger scale of economies in mass colour cosmetics, said the analyst.

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