By  on January 20, 2006

NEW YORK — As a response to the changing department store landscape, Coty is restructuring and renaming its global prestige beauty businesses, with an eye toward gaining an advantage in specialty stores.

Coty Inc. said Thursday that it has formed a new global business unit, called Coty Prestige, that was created out of the old Lancaster Group and old Unilever Cosmetics International, which Coty bought in May 2005.

The acquisition of UCI, with its newly resurgent Calvin Klein brand and the still-hot Vera Wang franchise, swelled the company's U.S. prestige fragrance sales volume, sources said, to $400 million — prompting Coty executives to claim number-one status in the fragrance market. Worldwide prestige fragrance sales are $1.5 billion, sources estimated

In an exclusive phone interview from Paris on Thursday afternoon, Michele Scannavini, president of the Coty Prestige businesses worldwide, noted that the reorganization would allow Coty to leverage the strengths of both the new retail landscape and the brands that now make up Coty's prestige portfolio.

"On one hand, it [the continuing consolidation of Federated-May stores] can simplify this market, and make for an easier structure that allows us to answer the evolution of the retail environment," said Scannavini. "On the other hand, it is challenging because the consolidation and the closing of [U.S. department] stores will naturally affect the business. We believe that reorganizing this way will be positive. We can continue to focus on our more mainstream brands in the department store world, while simultaneously strengthening the reach of our specialty store brands like Vera Wang and Marc Jacobs in our ‘ultraprestige' doors — allowing them to reach their full potential."

And it's potential that Coty is counting on: "There is clearly an opportunity to grow the business in specialty stores without cannibalizing existing business," he said, calling the more boutique brands "jewels."

Jean Mortier, formerly senior vice president of international for UCI, has been named senior vice president, commercial, to lead all of the sales organizations of Coty Prestige Worldwide. He will continue to report to Scannavini. Both Mortier and Scannavini are based in Europe.

Under the Coty Prestige beauty umbrella for the U.S., two distinct sales divisions have been announced. The prestige department stores division, to be headed up by Dominic Pisani as senior vice president of sales, has been organized to mirror the new geographic territories of Federated Department Stores, with Coty Prestige executives overseeing business in the West, Southwest, Central, Northeast and Southeast regions.A second U.S. sales group, the specialty stores division, will be headed by Dennis Keogh, who has been named senior vice president of specialty stores. This group will focus on growing sales in Neiman Marcus, Nordstrom, Bloomingdale's, Saks Fifth Avenue, Lord and Taylor and specialty boutiques in the U.S.

Both Pisani and Keogh will report to Bob Cankes, formerly president of Lancaster North America, who has been named president of Coty Prestige North America and will report to Mortier. In this role, Cankes will oversee North American sales for both the former Lancaster portfolio, which includes the fragrance brands of Sarah Jessica Parker, Jennifer Lopez, Kimora Lee Simmons, Marc Jacobs and Kenneth Cole, as well as the brands acquired in the Unilever deal, which include Calvin Klein, Vera Wang and Cerruti. Also reporting to Cankes is Janice Vitale, who has been named senior vice president of trade marketing for the U.S. organization. She was formerly vice president of retail development and trade marketing for Unilever Cosmetics International.

The reorganization, Scannavini added, will enable Coty to present a unified marketing effort worldwide. "This will give our businesses one point of view," said Scannavini.

Scannavini was effusive in his praise for Cankes: "He has grown our prestige portfolio in the U.S. to three times [its former size]," he noted.

Coty executives had foreshadowed a bit of the plan at October's Tax Free World Association show in Cannes, France, where Scannavini had announced that the UCI and Lancaster Group businesses would eventually be integrated in an effort to achieve chief executive Bernd Beetz's stated goal of becoming the top prestige fragrance producer globally. Scannavini said in October that Coty is now number one when prestige and mass fragrances are combined and third in prestige fragrance alone and in travel retail.

The former Lancaster Group was a quiet player on the U.S. scene until 2002, when it launched the first of its celebrity scents, Glow by JLo, the Jennifer Lopez fragrance that is widely credited with re-creating the prestige market celebrity fragrance genre. Before that time, it was perhaps known for its Davidoff Cool Water and Cool Water Woman scents, which are still perennial bestsellers.

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