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Coty Buys Unilever Prestige Fragrances

Coty Inc. upped the competitive ante dramatically in May when it acquired Unilever's prestige fragrance business.

Coty Inc. upped the competitive ante dramatically in May when it acquired Unilever’s prestige fragrance business, including the Calvin Klein and Vera Wang brands, with the ultimate goal of becoming “the world fragrance leader,” in the view of chief executive officer Bernd Beetz.

Four months later, in September, Beetz seemed like a prophet, when the new Calvin Klein women’s fragrance, Euphoria, raced to the top of department store charts.

Making it one of the biggest deals of the year, Coty agreed to pay $800 million for a scent portfolio of designer brands, including Calvin Klein, Cerruti, Vera Wang, Chloé and Karl Lagerfeld. Each became part of Lancaster Group Worldwide, Coty’s prestige division, which houses megawatt brands such as Jennifer Lopez, Marc Jacobs, Kenneth Cole and Nautica.

At the time of the announcement, Beetz described Klein as providing “a linchpin” of global power because of its strong presence in markets around the world. With the addition of the acquired brands, which do more than $600 million in estimated volume, it was anticipated that Coty might reach total sales of $3 billion within the next two years.

Coty is already the top player in mass-market fragrance, with such hits as Celine Dion, Mary-kateandashley, Adidas and Stetson. The acquisition will give Coty the critical mass in the prestige segment to match its strengths in mass, Beetz said at the time. With a stronger lineup covering all distribution channels and

extended geographic reach, Coty is poised to go after industry behemoths, namely L’Oréal, the Estée Lauder Cos. and Procter & Gamble.

This story first appeared in the December 6, 2005 issue of WWD.  Subscribe Today.