The beauty portfolio sale to Coty Inc. is still a good one, according to Procter & Gamble.
While the price P&G received for the sale of 41 beauty brands to Coty dropped to $11.4 billion after being announced at $12.5 billion, it was still $5 billion more than the value that P&G could have achieved by keeping the brands in-house, said P&G chief financial officer Jon Moeller during the company’s shareholder meeting on Tuesday.
“For perspective, that’s about $5 billion more value than we thought we could create internally by maintaining those brands, so this is a great outcome for share owners,” Moeller said. “The ultimate price depended on the price of Coty stock…and that has some natural variability of it.” Coty now owns fragrance licenses for Hugo Boss, Marc Jacobs, Calvin Klein and others, as well as Max Factor and Cover Girl.
P&G chairman, president and chief executive officer David Taylor presided over the meeting, highlighting that the company’s scent boosters for its laundry products are doing well. “Spurred by the rapid growth of scent beads, the U.S. fabric enhancer category is growing, up seven points on a value basis last year with the scent bead form, where P&G holds a 72 percent share, growing in the mid-20s [percentage gains],” Taylor said.
Asked about increased competition in men’s grooming for its Gillette brand, coming from Harry’s and Dollar Shave Club, Taylor responded: “Each of our brands works to improve their consumer value and that’s a combination of the performance of the product as well as the price that it has. Every category is trying to understand for the consumers it wants to serve how to do that better. Those products are superior — to some extent depending on price, some consumers may find it a good value, some may not. And what we’re working to do on every single category is listen to the consumers improve the product performance and then have a price that causes the total proposition to have good value.”
In grooming, P&G has recently introduced a second pivot point for its precision shavers called the FlexBall handle, as well as added lubrication before and after the blades, according to a P&G spokesman. In order to connect its products with its customers, P&G is also working on connecting where “their passions lie” the spokesperson said, including sports, and for events like Father’s Day.