Coty Chairman Peter Harf has assumed the additional role of Chief executive Officer. He replaces Pierre Laubies, who stepped down on 31 May. This is part of a strategic transformation that also includes the creation of a three-person Executive Committee.
Other members of the Executive Committee are Coty Chief Operating Officer and Chief Financial Officer Pierre-André Terisse and Coty Chief Transformation Officer Gordon von Bretten. Von Bretten, who joins from KKR Capstone, is Coty’s first-ever Chief Transformation Officer and will oversee the company’s ‘All in to Win’ transformation strategy.
Peter Harf is Founder and Managing Partner of JAB Investors. He was Coty’s Chief Executive from 1990-2001 and then Chairman until 2011. Harf is credited for building the ‘modern-day Coty,’ the company said.
He also has extensive industry experience and was previously Chairman and CEO of Benckiser and then Deputy Chairman of Reckitt Benckiser, a company he formed through the merger of Benckiser with Reckitt & Colman in 1999. He has also served as Chairman of AB InBev.
Coty’s Senior Management team will consist of Chief Commercial Officer Edgar Huber; President Luxury Brands Simona Cattaneo; Chief Supply Officer and Head of Research & Development Richard Jones; Chief Global Procurement Pascal Baltussen; Deputy Chief Financial Officer Laurent Mercier; Chief Legal Officer Kristin Blazewicz; and Chief Human Resources Officer Anne Jaeckin.
Pierre Dennis — who was appointed as Coty Chief Executive Officer in February — will not take up an executive position as part of the new management structure and has stepped down from the Board. He will remain as Senior Adviser to the company and leverage his knowledge and experience in the luxury industry.
Coty hopes that the executive leadership changes will increase its agility in decision making, execution and create accountability for improved performance.
The announcement coincides with the signing of a definitive agreement with KKR for the sale of Coty’s professional and retail hair business, which includes the Wella, Clairol, OPI and GHD brands (together known as Wella). The agreement values the Wella business at US$4.3 billion on a cash and debt-free basis. KKR will own 60% of this separate entity, with Coty owning the remaining 40%.
KKR has nominated one of its most experienced investors, KKR Partner and Head of EMEA Johannes Huth, to Coty’s Board. It will also nominate a second Board Member in the near term.
The partnership delivers immediate deleveraging via US$1 billion of direct investment and US$2.5 billion net cash proceeds from the Wella deal.
Coty said it hopes the sale of its professional and retail hair business will give it more flexibility to navigate current market challenges and focus on its core prestige and mass beauty portfolios.
It plans to reinforce its position in prestige fragrances and develop the ecommerce capabilities of its prestige beauty franchises. This includes Gucci, Calvin Klein, Hugo Boss, Burberry, and Kylie Beauty.
The company will also expand its omnichannel presence and reinvest in its hero mass beauty brands including Sally Hansen, Rimmel, CoverGirl and Max Factor.
To increase cost competitiveness, Coty is targeting a net reduction in fixed costs of US$600 million in cash over the next three years, which equates to 25% of its pro-forma fixed cost base.
Coty hopes that these measures will drive strong financial growth through to 2023.
Commenting on the partnership, Coty Chairman and Chief Executive Officer Peter Harf said: “I’ve known Coty for a long time and there is a lot of potential within this company. I’m delighted to return to an active leadership role. We are all energised by the task ahead – to lead Coty to the best it can be. Further, in KKR, we have a world-renowned investor that will work alongside us in transforming Coty.”
Coty Board Member and KKR Partner and Head of EMEA Johannes Huth added, “We are excited about our future collaboration with Peter Harf and the team at Coty. The company has tremendous potential and this transaction will position the business to deliver long-term value creation. Coty and Wella alike are going to benefit significantly from the transformation journey ahead.”
