Sue Y Nabi, Coty’s fifth senior since 2015, betting on a solution, a heavily indebted makeup artist can be found in a tube of Gucci lipstick sold online in China.
A year later in the work, A former beauty industry expert has launched a growth program aimed at promoting “celebrity” cosmetics produced by high-end companies, as well as promoting trade in China and skincare, two growing markets where Coty has long pursued rivals L’Oréal and Estée Lauder.
The company’s former executives “were not from good companies so they missed out on a lot of mistakes,” Nabi told the Financial Times. “My job is to set priorities for what we need to invest in our money and energy.”
Despite repeated conversions and enhancements through purchases, Coty did not post any profits for five years. In contrast, the regional leaders of L’Oréal and Estée Lauder have enjoyed many years of strong sales and economic growth driven by color cosmetics, skincare, and China until the Covid-19 hit. All of them are on track to go beyond the money that was made earlier this year even though a change in consumer habits comes as a result of closing and wearing a mask.
Coty managing director JAB, a hungry company that sells German billionaire assets. Reimann family, has a lot to climb on Nabi. Although Coty is one of its oldest assets, it has been selling weak spot in its record of about $ 34bn, which includes a beverage group Good Dr Pepper, a coffee expert JDE Peets, and food Panera Bread and Ready to eat.
Coty’s fix isn’t just about JAB’s pride. The company, led by chairman Peter Harf, is set to lose its reputation as it no longer relies on Reimanns’ assets to cover its $ 50bn investment over the past decade. It’s now seeking to elevate $ 5bn to grow in petcare after earning about $ 18bn from wealthy organizations, family offices, and universities since 2014.
The task will not be easy. Wendy Nicholson, a Citi analyst who has been following Coty for a long time, said some investors remain “very skeptical” because the company has not fulfilled a number of promises.
“They’ve been burned in the past so don’t believe the supervisors or owners have made the right decisions,” he said. “Opponents see Coty as a very sophisticated, unstable, and financially incompetent force to improve financial and regulatory performance. But shareholders are too high because there is so much room for change.”
Coty’s dilemma stems primarily from JAB’s idea of expanding its credit to transform the group, which originally focused on perfumes, into a small L’Oréal style found globally found in all beauty groups. In 2015, JAB sponsored Coty to buy Beautiful Procter & Gamble brands of $ 12.5bn to replace various hair care products and color cosmetics and increase its cost to $ 9bn.
But the controversy became more serious. Not only did Coty have more than $ 7bn in debt, the integration process was delayed and complicated as well-known P&G companies such as CoverGirl and Max Factor began to destroy the market for troubled startups.
Coty took $ 4bn inside notes on the P&G business in 2019, she continued to spend on purchasing items such as about $ 800m to buy stocks in two self-made brands founded by prominent American sisters. Kylie Jenner and Kim Kardashian.
Annoyed by his huge debt, Coty really did do not open a major part of the deal in 2020 by selling 60 percent of the hair care business, including Wella and Clairol brands, to the KKR secret fund for $ 2.5bn.
This decline, as well as the Covid-19 epidemic, meant that Coty’s $ 4.6bn annual revenue last year at the end of June was the same as before P&G.
Nabi’s generous donations reflect JAB’s interest in seeking new blood. In addition to the initial salary of € 3m per annum, the chief was offered a share of 30 million shares of three-year-old companies and did not agree to any performance objectives. Those shares are worth about $ 280m today from $ 108m when they entered.
Investigators welcomed Nabi’s appointment if previous CEOs had knowledge of consumer food, but not beauty.
The 53-year-old superintendent has spent more than a decade in the post of L’Oréal regional leader, starting as a trade advocate who later shaved southern France before leading major nations such as Lancôme and L’Oréal Paris. He resigned in 2014 to establish his own brand of the Orveda brand.
Not only can Nabi speak with authority from head to toe, but he also has a strange story. Born in Algiers as Youcef Nabi, he changed his name to Sue and showed if a woman was in L’Oréal about 15 years ago.
While it is rare to see transgender CEOs of major listed companies, Nabi does not consider himself a representative and wants to be judged by his actions. “It’s very important that people do not mistakenly think that I am here to check the box. I came here because I am the best person in the industry and not everything. ”
Growing up in a prominent Algerian family where his father was a power minister, Nabi moved to France at the age of 16 to study engineering. He says: “I used to phone Dad to let him come home, but he always told me to stay one day, one year. It gave him confidence and independence.
“I do whatever people ask me to do but I do it my way.”
Arriving in Coty, Nabi began to go through every kind of history from the low to medium-sized names sold at Walmart to the perfumes sold at Harrods to see their status, strengths and weaknesses. Jefferies scholar Stephanie Wissink compared the procedure to that of “an emergency room practitioner who is examining a test” to determine what should be saved and what should be abandoned.
He was particularly impressed with CoverGirl, which continued the recurring failure of which Nabi saw as misleading the nation from its cheap markets. He also unearthed neglected gemstones such as Lancaster, a high-quality sun cream with a history of backyard use used by the Monaco Princess, and placed it in the center of a push to skincare in China.
Another important factor was the expansion of Coty’s work under the patent of Gucci and Burberry brands to move away from the production and marketing of perfumes to help them establish new self-manufacturing lines. Considering their kind of power in China, Nabi wants to use it to complete the construction of Coty’s presence in the second largest market in the world.
“At the T-Mall, about 700m people have access to our products for the first time in China, which makes the atmosphere a barrier to growth,” he said.
Although Nabi worked in the field of medicine, the governing body was strengthened by the appointment of KKR’s former ally Gordon von Bretten as chief of reform and Laurent Mercier as chief financial officer.
The company, which publishes quarterly numbers on Monday, is expected to have a business day by the end of this month. It is too late to judge whether this change will be the last in Coty, said Nicholson of Citi, but he expects the group to make a big profit this year and thinks Nabi’s growth plan is wise.
But the shares are down 25 percent below $ 11.65 per share that JAB paid in 2019 to recover more energy, and about half of their first 2013 price.
“It’s the small achievements that help you change people’s minds internally and externally, while working to achieve the big ones that take a lot of time,” Nabi said.