Coty Agrees to Buy Skin-Care Company Philosophy From Carlyle
Coty Inc., the perfume maker owned by Joh A. Benckiser SE, will acquire beauty company Philosophy from private equity firm Carlyle Group as it seeks to build its luxury skincare business outside of Europe.
Philosophy will probably generate sales of more than $200 million this year, New York-based Coty said today in a statement. The sale price wasn’t disclosed. Carlyle, based in Washington, had sought $1 billion for the skincare maker, according to people familiar with the situation who declined to be identified because the negotiations were private.
The acquisition of Philosophy, based in Phoenix, Arizona, forms part of Coty’s strategy to increase sales of luxury skincare and fragrances, particularly in the U.S. and Asia. Coty this month agreed to acquire German cosmetics firm Dr. Scheller Cosmetics AG and is also considering a purchase of OPI Products Inc., the North Hollywood, California-based nail polish maker, according to two people familiar with the situation.
Philosophy makes anti-aging moisturizers, one-minute skin peels, perfumes and lipsticks which are sold at Sephora, J.C. Penney Co., Nordstrom Inc., Macy’s Inc. and QVC Inc. stores. Skin-care entrepreneur Cristina Carlino founded the company in 1996 as a way of bridging the gap between skin-care products offered in doctor’s offices and retail outlets.
Coty is aiming to almost double sales to about $7 billion by 2015. The company reported revenue of about $3.6 billion in the financial year that ended in June.
Coty’s luxury business has revenue of about $1.7 billion, around half of which comes from Europe, according to Michele Scannavini, head of the prestige unit. The U.S. accounts for 25 percent of sales, while Asia represents 10 percent. Fragrances such as Calvin Klein and Chloe account for 95 percent of Coty Prestige revenue, while the rest comes from skincare, mainly under the Lancaster brand, which is present only in Europe.
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