Imagine a beauty giant, once a powerhouse in the industry, now struggling to reclaim its former glory. That’s the story of Coty, a company that went from a high-profile IPO in 2013 to a stock price plummeting to a fraction of its initial value. But what exactly went wrong? And can its new leadership turn things around? Let’s dive into the dramatic rise and fall—and potential resurgence—of this iconic brand.
When Coty went public in New York on June 13, 2013, with a share price of $17.50, it was one of the largest IPOs for a consumer products company at the time. Fast forward to today, and the company’s stock has cratered to just $2.51, battered by questionable decisions, a revolving door of executives, and a multibillion-dollar deal that never quite delivered. But here’s where it gets controversial: Was this downfall inevitable, or could it have been avoided with better leadership and strategy?
All eyes are now on Markus Strobel, the former president of Procter & Gamble’s skincare and personal care business, who took the helm as executive chairman and interim CEO of Coty Inc. on January 1. He succeeds Sue Nabi, the former L’Oréal executive whose tenure started strong but quickly unraveled. Nabi’s time at Coty was marked by a staggering pay package—an estimated $463.7 million over five years—but also by strategic missteps that left the company reeling.
In his first earnings call on February 5, Strobel didn’t mince words about the challenges ahead. He unveiled a turnaround plan dubbed “Coty Curated,” focusing on sharper priorities, targeted investments, improved execution, and increased support for core businesses. And this is the part most people miss: Strobel also emphasized that Coty has deleveraged significantly since 2021, shedding over four times its debt. But is this enough to win back skeptical investors?
“This leadership transition marks a fresh chapter grounded in realism, discipline, and focus,” Strobel said. “We’ll be transparent about what works and what doesn’t. We’re setting balanced short- and long-term goals, concentrating resources where they matter most, and continuously reviewing our portfolio to unlock value. Consumer demand is our North Star.”
But the road to recovery won’t be easy. At its peak in 2015, Coty’s stock soared to $32.70. By the time Nabi took over in September 2020, it had fallen to around $3.70. Strobel acknowledged investor skepticism, noting that the stock has hovered around $3 for months, reflecting doubts about Coty’s ability to compete in the beauty industry and deliver consistent growth.
Despite Strobel’s reassurances—and a 10% revenue increase in Coty’s core prestige fragrance category from 2021 to 2025—analysts remain cautious. Barclays analyst Lauren Lieberman bluntly stated, “For the better part of the past 2+ years, it’s been difficult to listen to Coty’s calls, as the company seemed out of touch with its challenges.”
Here’s the burning question: Can Coty’s new leadership restore its luster, or is the company doomed to repeat past mistakes? Robert Ottenstein of Evercore highlighted the central debate: Can operational efficiency coexist with the creativity and speed needed to compete in the beauty market? And Sydney Wagner of Jefferies warned that slowing fragrance growth and underperformance in mass beauty remain significant hurdles.
To understand Coty’s struggles, we must rewind to 2016. That’s when Coty acquired 41 beauty brands from Procter & Gamble, including CoverGirl and Max Factor, in an $11.6 billion deal. The transaction, engineered by then-interim CEO Bart Becht and former CEO Peter Harf, saddled Coty with $1.9 billion in debt. Analysts warned that reviving these declining brands would require massive investment, but the debt load made that nearly impossible.
But here’s the twist: The sale was structured as a Reverse Morris Trust, allowing P&G to oversee the brands for 18 months. During this time, top executives were reassigned, and investments were minimal. Becht, who stepped in as interim CEO, was criticized for trying to commoditize beauty and for replacing key talent with executives from Reckitt Benckiser, creating a cultural disconnect.
“Coty never should have acquired P&G’s mass-market division,” said one industry insider. “Most of the brands, especially CoverGirl and Clairol, were already struggling, and the integration was a disaster.” Retailers, who once stocked these brands to maintain relationships with P&G, dropped them after the sale to Coty.
Adding to the chaos was Coty’s revolving door of CEOs—eight since 2010. Sue Nabi, despite her marketing wins, was seen as a “structural CEO” who failed to streamline the company’s sprawling portfolio of small brands. Her decision to partner with Orveda, a prestige skincare brand she cofounded, raised eyebrows. Coty invested tens of millions in Orveda, opening stores in prime locations, but the brand generated just $5 million in sales in 2024. Last week, Coty terminated its license with Orveda.
And this is the part that stings the most: L’Oréal will take over Coty’s crown jewel license for Gucci in 2028, signing a 50-year partnership with Gucci’s parent company, Kering. This move, coupled with rumors of divestitures, has left investors questioning Coty’s future.
So, what now? Can Strobel revive Coty? Susan Anderson of Canaccord Genuity believes it’s possible but stresses the need for permanent leadership to provide stability. “Investors want certainty,” she said. “Coty has great brands, especially in prestige fragrances, but they need to turn around sales and revitalize struggling lines like CoverGirl.”
The beauty industry is unforgiving, and Coty’s story is a cautionary tale of ambition, missteps, and the challenges of reinvention. But here’s the ultimate question for you: Do you think Coty can reclaim its former glory, or is its best days behind it? Let’s debate in the comments!
