By and  on July 9, 2009

Coty Inc. wants a bigger piece of the estimated $8 billion Russian beauty market.


The New York-based company has established its own subsidiary in Moscow, taking another large step in the company’s quest to enhance its position as one of the global beauty leaders.

With this latest move, Coty established itself in Russia with a single stroke. Chief executive officer Bernd Beetz indicated he expects to reap rewards from his new direct market involvement.

Citing the importance of Russia as a market for perfumes and cosmetics, Beetz said in an interview Wednesday, “Our market share was much below what we usually do in the rest of the world. Our brands are underpenetrated. We see a lot of upside for our brands.”

Neither Beetz nor any other Coty executive would discuss sales projections. But one market analyst speculated the company could eventually gain “a couple of share points in growth.”

More than a decade ago, Coty flirted with owning its own subsidiary in Russia, opening its own Moscow office in 1997. But after six months, the Russian economy collapsed in a market meltdown that left Coty in an untenable position. The company then switched to distributors. By returning with its own subsidiary, Coty joins the ranks of practically all its main competitors, each with a significant presence on the Russian market.

The company generates almost $4 billion in net wholesale volume with distribution in 90 markets worldwide. Coty said it does 66 percent of its global sales volume outside of the U.S. Euromonitor, the global consumer sales tracking firm, has rated Coty with a 2.9 worldwide market share in 2008.

Some Coty products have been on the Russian market, but they have been handled by two local distributors. In this move, Coty acquired one of the distributors, Beauty & Co., complete with staff and a Moscow office.

Roman Terekhov, who was general manager and commercial director of Beauty & Co., became general director of the new Coty subsidiary. He is responsible for day-to-day operations in Russia and oversees a staff of 60 people. The office is located at 69, Sadovnicheskaya Emb.

“Roman’s extensive industry knowledge, especially of the Russian market, and extensive business experience makes him an outstanding addition to the Coty family,” Beetz said.

The company said the new subsidiary will immediately “manage the marketing, sales and distribution of select Coty products.” The brands now in circulation in Russia come from different divisions, including the upscale Coty Prestige and the mass market oriented Coty Beauty. The names now in circulation include Rimmel color cosmetics, Adidas personal care products, Lancaster skin and sun care products and Calvin Klein, Céline Dion, Cerruti, Chloé, Chopard, David Beckham, Davidoff, Esprit, Jil Sander and Marc Jacobs fragrances.

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