The deal, worth £180 million, will take effect from October (subject to regulatory approvals), at which point Coty will buy approximately £50 million of inventory from Burberry. The remaining £130 million will be paid to Burberry directly for the global license and transfer of the beauty business. Burberry will also receive ongoing royalty payments.
Burberry’s in-house beauty division was launched in 2013 and currently has two fragrances: My Burberry, and Mr Burberry, and a makeup range. Burberry will retain creative control of the beauty division under the new agreement.
Coty already owns or has majority stakes in many big name beauty brands including Younique, ghd, OPI, Wella Professionals, Gucci, Philosophy, Hugo Boss, Calvin Klein, Marc Jacobs, Max Factor, Rimmel, and Covergirl.
President of Coty Luxury, Edgar Huber, said: “Burberry is an iconic luxury brand. It fits perfectly with Coty Luxury’s portfolio, which includes contemporary and globally relevant prestige beauty brands. We are uniquely positioned to develop Burberry Beauty to the next level. This is another significant step in building Coty’s Luxury division.”
Christopher Bailey, Chief Creative and Chief Executive Officer at Burberry commented: “We are delighted to partner with Coty, a world leader in luxury fragrance and make-up. Working with a global partner of Coty’s scale and expertise will help drive the next phase of Burberry Beauty’s development and position this business for growth.”