NEW YORK, United States — Coty Inc is looking to sell its business unit that houses brands such as Wella, Clairol and OPI as part of an ongoing plan to streamline its operations and cut debt, sending its shares up 11 percent on Monday.
The company said it was also exploring options for its Brazilian unit as it focuses on its fragrance, cosmetics and skin care businesses.
It would use the proceeds from any of the transactions to pay down debt and return excess cash to shareholders, the company said in a statement.
In July, Coty laid out an ambitious four-year restructuring plan that involved reducing layers and reorganising the operation.
Coty's professional beauty unit, which primarily focuses on hair and nail care products for salon professionals, raked in sales of about $1.81 billion in fiscal 2019 and accounted for about 21 percent of total revenue.
The company's consumer beauty unit, however, has been struggling mainly due to the poor performance of brands it bought from Procter & Gamble Co, including Covergirl and Max Factor, forcing Coty to record billions of dollars in writedowns.
"(The announcement) accelerates this transformation and will help ... deleverage our balance sheet, and improve our ability to invest in areas with the greatest growth potential," Chief Executive Pierre Laubies said.
By Aishwarya Venugopal; editor: Anil D'Silva.