JAB’s Peter Harf Places a $150 Million Wager on Coty
JAB’s Peter Harf Places $150 Million Bet on Coty’s Growth Runway
(Bloomberg) -- Coty Inc.’s Peter Harf is boosting his personal stake in the company by $150 million, giving a vote of confidence to the cosmetics company as it struggles with changing consumer tastes during the pandemic.
Harf, who has served multiple stints as Coty’s chief executive officer and is now executive chairman, reached a deal to buy the shares from KKR & Co., according to a filing. He owned 12.3 million shares as of February, according to a regulatory filing, a stake that would be worth about $59 million currently.
Coty shares rose 4.6% to $5.01 at 9:31 a.m. in New York trading.
The latest purchase is a show of support for Coty after a challenging year of stagnating sales, changing consumer tastes and retail challenges caused by the coronavirus pandemic. CEO Sue Nabi, who took over in September, is pursuing a turnaround effort to boost sales and reverse a stock slide of 57% this year through Friday.
“I put my money where my mouth is. I believe in Coty and I believe in Sue and I am investing my own money into this company,” Harf, 74, said in an interview. Harf is also chairman of JAB Holding Co., the largest shareholder in Coty with about a 60% stake.
Last month, the company hired L’Oreal veteran Isabelle Bonfanti as its chief commercial officer of luxury. With Coty looking to spur growth in its Asia-Pacific business, Bonfanti assumes the role with experience in developing skin-care and makeup brands in the region. The company also said Jean-Denis Mariani will lead its direct-to-consumer efforts -- the same role he had at an LVMH-owned brand.
Coty’s market capitalization currently stands at about $3.8 billion.
Nabi’s Strategy
Nabi founded skincare line Orveda and was a former executive at L’Oreal. Harf named the industry veteran as his successor in July to lead Coty’s turnaround amid rapid changes in consumer tastes amid the pandemic. While demand for makeup has been hurt by the quarantines and lockdowns, Nabi has undertaken a series of leadership changes to better position the company to capitalize on a booming skin-care market.
Coty sees a series of tie-ups in the Kardashian empire playing a large role in the effort. After raising the stakes on its $200 million bet on Kim Kardashian West’s color cosmetics brand, Nabi has begun working with the reality TV star to develop skin-care products.
The pivot would complement younger sister Kylie Jenner’s line, which has delved into the budding market as well. Kylie Skin recently expanded its online platform into Australia, Germany and the U.K markets where Coty has increased its presence over the past few years.
“This company owns brands that can own almost every territory in the well-being, self-care, and skin-care arena,” Nabi said in an interview.
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