COTY to sell Wella?

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Wella and its sister brands are on the block again after Coty’s recent announcement regarding its plans to sell its professional beauty division. Ranking #2 in the global professional hair care market, according to Kline’s Salon Hair Care Global Series, makes Coty an attractive business to potential buyers. 

Since acquiring Wella, which is the #1 professional color brand globally, Coty has been fiercely expanding its presence in some strategic salon hair care markets such as China, Japan, Brazil, and even L’Oréal-dominated France. Wella has gained 1.3% share points ahead of L’Oréal Professionnel, its closest competitor in the hair coloring segment, since it was acquired from Procter & Gamble in 2015, finds Kline’s Salon Hair Care Global Series. The brand has developed a two-tier strategy focusing on selling its hair coloring products in salons while also expanding in the retail area.

In the professional nail care space, OPI continues to be the global leader with a strong presence across the globe. The brand holds a 24% market share in the United States and continues to stay on top of market trends, establishing itself in the fast-developing dipping powders segment.

L’Oreal, the distant market leader in the global professional hair care industry, is not a likely suitor for the hair brands. The company likely would not receive regulatory clearance, as this would give it control of more than one-third of the global market and over 40% of the European market. 

Henkel is a likely candidate, it has ranked a distant #3 globally for years. However, challenges exist, as Henkel’s biggest brand in the portfolio is German color-focused brand Schwarzkopf Professional, and this could result in a potential conflict of interest with Wella.

Kao is another potential buyer. It would put Japanese Kao in a new sphere within the salon hair care market, placing it solidly at #2. However, its Goldwell brand has a long competitive history with fellow German brand Wella. 

Unilever is another possible contender. It has been showing signs of reestablishing itself in the professional arena with TIGI’s salon-only Copyright Care line. Wella could definitely find a home in Unilever’s more retail-focused portfolio.

Within the broader beauty industry, we may see interest from foreign firms like Amorepacific (South Korea) or Natura (Brazil), which are both actively growing their businesses abroad, or from long-established multinationals like Colgate-Palmolive, which has already been dipping its toe in the professional beauty arena with its acquisition of professional skin care brands in 2017. Certainly, financial and private-equity firms should also be interested in considering this business.

Sourced from : PR News Wire.

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