Coty has named Markus Strobel, a former Procter & Gamble executive, as chairman and interim CEO, taking over at a crucial time as the company faces mounting challenges in its mass-market sector.
Having seen its shares plummet over 50 percent this year, Coty is under increasing pressure to rejuvenate sales amidst fierce competition from emerging beauty brands. On Monday, shares listed in Paris dipped by about 5 percent, while those traded in the U.S. remained inactive before market opening.
A line chart from 2020 to 2025 illustrates Coty’s share price, which surged significantly from 2021 to 2023, followed by a decline through 2024 and 2025. This chart notably reflects the duration of Sue Nabi’s tenure as CEO, culminating in a strategic review announcement for 2025.
Markus Strobel, who has dedicated over thirty years to Procter & Gamble, leading its global skin and personal care division most recently, will take the reins from Sue Nabi, who is stepping down after a five-year term.
No timeline has been provided for the appointment of a permanent CEO, reflecting ongoing uncertainty.
This management shift aligns with broader trends in the consumer goods industry, where many companies are navigating fluctuating spending habits.
Strobel’s leadership begins on January 1. He brings experience from high-profile labels like Gucci, Dolce & Gabbana, Valentino, and Hugo Boss, along with brands acquired by Coty in a decade-ago deal valued at $12.5 billion.
He will also step into the role of executive chairman, succeeding Peter Harf, who is retiring after over thirty years on Coty’s board. Harf also concluded his term this year as chair and managing partner of JAB Holding, Coty’s largest investor.
A source familiar with the situation mentioned that the search for a permanent CEO is already in progress, with the recent chair appointment providing an opportune moment for leadership transition.
JAB Advocates for Leadership Change
According to a report in The Financial Times, JAB is pushing for a leadership overhaul at Coty, aiming to facilitate the departures of both Harf and Nabi.
JAB, which manages assets exceeding $40 billion, holds approximately 52 percent ownership of Coty. They have yet to respond to inquiries but have made Coty’s statement available on their website.
Under Nabi’s leadership, Coty achieved a notable decrease in leverage. The company’s net debt to core earnings ratio dropped dramatically from over seven times in 2020 to below three times.
Recently, Coty finalized a 2020 strategy by selling its remaining 25.8 percent stake in hair care brand Wella to KKR for $750 million.
Review of Consumer Beauty Segment
Coty has affirmed that Strobel enjoys the complete support of its board during this critical phase, coinciding with an ongoing strategic review of its consumer beauty division.
This review, initiated in September, may result in the sale of brands including CoverGirl and Rimmel, as Coty pivots toward its more lucrative fragrance segment.
Strobel remarked, “There is boundless opportunity to enhance growth, fortify our standing in both prestige and mass beauty, and create lasting value for shareholders, partners, and consumers globally.”
However, analysts, including CFRA Research’s Ana Garcia, have indicated that heightened competition and a recent slowdown in the beauty market are significant contributors to Coty’s challenges, asserting that sales pressure will likely persist.
Coty is also set to lose its exclusive rights to Gucci fragrances and beauty products in 2028, following Kering’s decision to sell its beauty division to L’Oréal.
Coty had fallen short of first-quarter profit projections as retailers reduced orders amid economic and tariff uncertainties. Nevertheless, the company has projected second-quarter like-for-like sales to fall at the upper end of its prior guidance, banking on consistent demand for Calvin Klein and Hugo Boss fragrances.
Changes in Consumer Sector Leadership
Leadership changes are occurring rapidly within the consumer goods sector, with companies replacing CEOs at a pace reminiscent of sports teams swapping coaches due to increased impatience with sluggish growth, tariff issues, and the ongoing task of appealing to younger consumers.
Recently, Kraft Heinz appointed former Kellogg chief Steve Cahillane as CEO, joining Coca-Cola and Lululemon, which have also made new leadership appointments, alongside other firms such as Unilever and Nestle that are undergoing management revamps.
