NEW YORK--(BUSINESS WIRE)--Jan. 10, 2017--
Coty Inc. (NYSE: COTY) announced today that it has entered into a
partnership with the Founders of Younique, a leading online peer-to-peer
social selling platform in beauty. Under the proposed agreement, Coty
intends to acquire 60% of Younique while the Founders will own the
remaining 40%. Younique’s Founder and current CEO, Derek Maxfield, and
Chief Visionary Officer, Melanie Huscroft, will continue to lead the
business in the new partnership.
Younique was founded in 2012 in the United States by siblings Derek
Maxfield and Melanie Huscroft, with a mission to uplift, empower and
validate women across the globe. Younique’s innovative makeup and skin
care products are sold through its disruptive peer-to-peer e-commerce
platform. This platform enables Younique’s community of independent
presenters to leverage social media in marketing and distributing
Younique’s line of innovative beauty products directly to consumers.
Younique’s highly scalable technology platform is built for mobile-first
e-commerce and seamless global expansion, with approximately 200,000
active presenters and over 4.1 million consumers in 10 countries,
including the U.S., U.K., Canada, Australia, New Zealand, Germany,
Mexico, France, Spain and Hong Kong. Younique expects to generate
approximately $400 million in net revenues in 2016.
This partnership will combine Younique’s high growth e-commerce platform
and social selling direct-to-consumer business model with Coty’s beauty
product R&D and innovation know-how, as well as its extensive
manufacturing and supply chain capabilities. Together, Younique and Coty
expect to accelerate the product offering and geographical expansion of
Younique.
Coty will acquire a 60% stake of Younique for approximately $600 million
in cash which will be funded through a combination of cash on hand and
available debt facilities with marginal impact on Coty’s leverage ratio.
The transaction is subject to customary closing conditions and is
expected to close during Coty’s 2017 fiscal third quarter. The
transaction is expected to be immediately accretive to Coty’s top-line
growth, EBITDA margin and FY17 earnings.
Camillo Pane, Coty’s Chief Executive Officer, said, “Derek and Melanie
are tremendous entrepreneurs who have built one of the most engaging and
fastest growing e-commerce companies in beauty. Alongside the rest of
Younique’s team and in partnership with their presenters, they have been
able to impact the lives of millions of consumers across a number of
countries with a mission to uplift and empower women. We look forward to
working with them to continue supporting this mission and building
Younique into a leading global e-commerce beauty company.”
Derek Maxfield, Younique’s CEO and Founder, said, “We are thrilled to
have Coty as a partner and expect that together we will be able to take
Younique to new heights. Coty and Younique share a passion for beauty,
an entrepreneurial spirit, as well as complementary missions. I am very
excited about this partnership and everything it can bring to Younique’s
employees, presenters and loyal consumers across the world.”
Younique will operate as a separate business within Coty’s Consumer
Beauty division. It will continue to be led by its current CEO, Derek
Maxfield, Chief Visionary Officer, Melanie Huscroft, and Younique’s
management team, in partnership with Coty.
Coty is proud to support the further advancement of the Younique
Foundation and its mission to support and empower victims of sexual
abuse and their families.
About Coty Inc.
Coty is one of the world’s largest beauty companies with approximately
$9 billion in revenue, with a purpose to celebrate and liberate the
diversity of consumers’ beauty. Its strong entrepreneurial heritage has
created an iconic portfolio of leading beauty brands. Coty is the global
leader in fragrance, a strong number two in professional salon hair
color & styling, and number three in color cosmetics. Coty operates
three divisions – Coty Consumer Beauty, which is focused on color
cosmetics, retail hair coloring and styling products, body care and mass
fragrances sold primarily in the mass retail channels with brands such
as COVERGIRL, Max Factor and Rimmel; Coty Luxury, which is focused on
prestige fragrances and skincare with brands such as Calvin Klein, Marc
Jacobs, Hugo Boss, Gucci and philosophy; and Coty Professional Beauty,
which is focused on servicing salon owners and professionals in both
hair and nail, with brands such as Wella Professionals, Sebastian
Professional and OPI. Coty has approximately 20,000 colleagues globally
and its products are sold in over 130 countries. Coty and its brands are
committed to a range of social causes as well as seeking to minimize its
impact on the environment.
For additional information about Coty Inc., please visit www.coty.com.
About Younique
Founded in 2012 by Derek Maxfield and Melanie Huscroft, Younique is a
disruptive, peer-to-peer e-commerce platform that enables its community
of independent presenters to leverage social media to market and
distribute Younique’s line of innovative beauty products. Younique
offers high-quality cosmetic and skin care products via its
approximately 200,000 active presenters, selling in 10 countries. The
company's product philosophy focuses on the intersection of science and
nature to offer innovative and trend-leading products that support
strong brand recognition with loyal presenters and consumers. Younique
is a mission-first company, committed to uplifting, empowering and
validating women everywhere. The company currently operates in the
following markets: United States, Canada, Mexico, Australia, New
Zealand, the United Kingdom, Germany, France, Spain, and Hong Kong.
Younique is a high growth beauty business and expects to generate
approximately $400 million in net revenues in 2016 with strong
profitability.
Discover more at: www.youniqueproducts.com
Forward-Looking Statements
Certain statements in this communication are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements reflect Coty Inc.’s
(“Coty’s”) current views with respect to, among other things, the future
operations and financial performance of Younique and Coty, expected
growth, Coty’s ability to support its planned business operations on a
near- and long-term basis, the risks and rewards of a partnership with
Younique, the ability to operate Younique as a separate business, the
limited integration and synergies expected from the partnership with
Younique, and expected EPS and margin accretion. These forward-looking
statements are generally identified by words or phrases, such as
“anticipate”, “estimate”, “plan”, “project”, “expect”, “believe”,
“intend”, “foresee”, “forecast”, “will”, “may”, “should”, “outlook”,
“continue”, “target”, “aim” and similar words or phrases. These
statements are based on certain assumptions and estimates
that Coty considers reasonable and are subject to a number of risks and
uncertainties, many of which are beyond the control of Coty, which could
cause actual events or results to differ materially from such
statements, including:
-
Coty’s ability to achieve its global business strategy, compete
effectively in the beauty industry and achieve the benefits
contemplated by the partnership with Younique within the expected time
frame;
-
Inherent risks associated with joint ventures and partnerships,
including relating to control and decision-making, compliance,
financial accounting and tax considerations, transparency and customer
relations;
-
managerial, integration, operational, regulatory, legal and financial
risks associated with acquisitions generally and the transaction with
Younique specifically, including risks related to the entry into a new
distribution channel, the potential for channel conflict, risks of
retaining customers, Presenters and key employees, difficulties of
integration (or the risks associated with limiting integration), risks
related to regulation of multi-level marketing business models,
ability to protect trademarks and brand names, litigation or
investigations by governmental authorities;
-
changes in law, regulations and policies that affect Coty’s or
Younique’s business or products, including risk that direct selling
laws and regulations may be modified, interpreted or enforced in a
manner that results in a negative impact to Younique’s business model,
revenue, sales force or business;
-
Coty, its brand partners' and licensors' and Younique’s ability to
obtain, maintain and protect the intellectual property rights,
including trademarks, brand names and other intellectual property used
in their respective businesses, products and software, and their
abilities to protect their respective reputations;
-
Risks to Coty and Younique of claims by third parties for infringement
on intellectual property rights;
-
Younique’s relationship with, and its ability to influence the actions
of, its Presenters, as well as the potential for Presenters to violate
applicable law or have their classification as independent contractors
challenged;
-
the integration of The Procter & Gamble Company’s (“P&G”) global fine
fragrances, salon professional, cosmetics and retail hair color
businesses, along with select hair styling brands with Coty’s
business, operations and culture and the ability to realize synergies
and other potential benefits within the time frames currently
contemplated;
-
Coty’s ability to successfully execute its announced intent to divest
or discontinue non-strategic brands and to rationalize wholesale
distribution by reducing the amount of product diversion to the value
and mass channels;
-
Coty’s and Younique’s ability to anticipate, gauge and respond to
market trends and consumer preferences, which may change rapidly, and
the market acceptance of new products;
-
risks related to Coty’s and Younique’s international operations,
including reputational, regulatory, economic and foreign political
risks;
-
dependence of Coty and Younique on certain licenses, entities
performing outsourced functions and third-party suppliers, including
third party software providers;
-
administrative, development and other difficulties in meeting the
expected timing of market expansions, product launches and marketing
efforts;
-
global political and/or economic uncertainties or disruptions;
-
consolidation among retailers, shifts in consumers’ preferred
distribution channels and other changes in the retail and wholesale
environment in which Coty and Younique do business and sell their
products;
-
increased competition, including as a result of adoption by
competitors of Coty’s or Younique’s technology and go-to-market
strategies;
-
disruptions in operations, including due to disruptions or
consolidation in supply chain, manufacturing rights or information
systems, labor disputes and natural disasters;
-
increasing dependency on information technology and Coty's and
Younique’s ability to protect against service interruptions, data
corruption, cyber-based attacks or network security breaches, costs
and timing of implementation and effectiveness of any upgrades to
their respective information technology systems and failure by Coty or
Younique to comply with any privacy or data security laws or to
protect against theft of Presenter, customer, employee and corporate
sensitive information;
-
the illegal distribution and sale by third parties of counterfeit
versions of Coty’s and Younique’s products;
-
and other factors described elsewhere in this document and from time
to time in documents that Coty files with the Securities and Exchange
Commission.
More information about potential risks and uncertainties that could
affect the Coty’s business and financial results is included under the
heading “Risk Factors” and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” in Coty’s Quarterly
Report on Form 10-Q for the fiscal quarter ended September 30, 2016 and
other periodic reports Coty has filed and may file with the Securities
and Exchange Commission from time to time.
All forward-looking statements made in this communication are qualified
by these cautionary statements. These forward-looking statements are
made only as of the date of this communication, and Coty does not
undertake any obligation, other than as may be required by law, to
update or revise any forward-looking or cautionary statements to reflect
changes in assumptions, the occurrence of events, unanticipated or
otherwise, or changes in future operating results over time or otherwise.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170110005751/en/
Source: Coty Inc.
Coty
Investor Relations
Kevin Monaco, +1 212 389 6815
or
Media
Jennifer
Friedman, +1 917 754 8399
Jennifer_Friedman@cotyinc.com