Coty Unveils Integration Strategy

Coty Inc. unfurled a sweeping plan to integrate the Unilever Cosmetics International business into Coty's Lancaster Group Worldwide.

CANNES, France — With its recently acquired Calvin Klein Euphoria fragrance notching its sixth week in the number-one spot in the U.S., Coty Inc. celebrated by unfurling a sweeping plan to integrate the Unilever Cosmetics International business into Coty’s Lancaster Group Worldwide.

The news was delivered in equally dramatic fashion in a hotel ballroom here packed with distributors, duty-free retailers and other executives in town for the Tax Free World Association show. (For more, see pages 6 and 7.)

Michele Scannavini, president of Lancaster, said that the motive for acquiring the UCI business — including the Calvin Klein, Vera Wang, Karl Lagerfeld, Cerruti and Chloé fragrance licenses — was to achieve the number-one position in the world’s prestige fragrance market.

In an interview prior to the celebration, Scannavini said Coty now is number one in the world’s prestige and mass fragrance markets combined, and number three in prestige fragrance alone and in travel retail. In the U.S., the group is number three, but in women’s fragrances it is number two, with five in the top 15. In men’s, four of its brands are in the top 15.

Scannavini hinted two new merchandising initiatives that are both applicable to travel retail — “generation next,” a youth, jeans-oriented entity, and “celebrity corner,” which will be related to entertainment — are on the drawing board.

During the interview and the following presentation, a composite picture emerged of the new management structure. In terms of product development, Catherine Walsh is in charge of the American fragrances, meaning she will acquire Calvin Klein and Vera Wang alongside her previous brands, which include Kenneth Cole and Marc Jacobs.

Françoise Muriez is now charged with European fragrances, which count among them Chloé, Cerruti and Karl Lagerfeld.

Scannavini decided to transplant the Lancaster makeup and skin care business into a separate treatment division that will be headed by former Christian Dior executive Bernard Potier.

“I believe we have an important opportunity in skin care,” said Scannavini. “We have the creativity and the innovation.”

He indicated that the group will be on the lookout for possible acquisitions in treatment.

This story first appeared in the November 4, 2005 issue of WWD.  Subscribe Today.

According to industry sources, the Lancaster brand has sales of about $120 million, with some $85 million of that coming from treatment.

During the interview, Scannavini also left the door open for creating a beauty and skin care component for the Vera Wang beauty business. “I think Vera Wang could be phenomenal for Asia as a total brand,” he said.

During the presentation, Jean Mortier, the newly named senior vice president commercial of Lancaster, outlined the new travel-retail and regional lineup for the company.

Joe Porcelli was appointed chief of global travel retail and is also heading Latin America. Peggy Elsrode is in charge of the U.K., the Benelux countries, Switzerland, Scandinavia, Eastern Europe and Russia. Patrick de Lambilly has Asia-Pacific and the Middle East. Pierre Sivac heads up France, Spain, Portugal, Italy and Greece. Steffen Seifarth is chief of Germany and Austria. Anne Gabarre will lead marketing services.

Mortier brought his spirited presentation to a ringing close by reminding the crowd that it was Halloween night. However, with the merging of the two businesses, the drill would not be “trick or treat.”

“No, with Lancaster, it’s double treat,” he said.