Coty Contends With Noxious Perfume Accusations

Welcome to The Brink. I’m Eliza Ronalds-Hannon, a reporter in Atlanta, following troubles at beauty brand Coty, which is being accused of breaching license agreements to tarnish competitors’ labels. We also have news on Accendra Health’s debt exchange and a software maker’s takeover by a Blackstone-led group of private credit investors. Follow this link to subscribe. Send us feedback and tips at debtnews@bloomberg.net.

Coty’s income may be plunging, but one cash spinner is its sales of perfume — its own and other labels.

In earnings this month, the company pointed to the fragrance business as its likely source of sales growth in coming quarters. But first, it has to contend with accusations it mis-sold rival perfumes, diluting their brand’s potency and making its own more alluring by comparison.

The owner of CoverGirl cosmetics is being sued for breaching licensing agreements that dictate where it can sell fragrances like David Beckham’s Classic Blue and Nautica’s Voyage, after those labels were discovered at dozens of unauthorized distributors.