Coty has launched a strategic review of its consumer beauty unit, which will include potential divestitures or spin-offs of some of its cosmetics brands.

The strategic review will focus on the company’s US$1.2 billion revenue mass colour cosmetics business, including brands such as CoverGirl, Rimmel, Sally Hansen, and Max Factor, and its Brazilian business.

As part of the move, the company will assess a full range of alternatives, including partnerships, divestitures, spin-offs, and other potential strategic actions to maximise long-term value and strengthen the balance sheet.

Coty has appointed Gordon von Bretten, board member and former chief transformation officer, as president of consumer beauty to lead the review. Reporting to CEO Sue Nabi, von Bretten will be in charge of delivering the full potential of brands in the mass cosmetics, mass skin, and personal care businesses.

Stefano Curti, chief brands officer of consumer beauty, and Alexis Vaganay, chief commercial officer of consumer beauty, will step down from their roles.

The initiative comes as the consumer beauty unit saw a 12 per cent sales decline in the fourth quarter and an 8 per cent drop in the year ended June 30. 

Total company revenue fell 4 per cent for the year and 8 per cent for the fourth quarter. Consumer beauty sales represent more than 35 per cent of overall sales.

Aside from the review, Coty plans to further integrate its prestige beauty and mass fragrance businesses, which together account for about 69 per cent of company sales. 

The company said it will initiate organisational changes to drive much closer coordination, as well as maximise growth prospects and synergies between prestige and consumer fragrances.

For the last fiscal year, Coty swung to a net loss of $381.1 million from a net income of $76.2 million.