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Coty announces $600 million restructuring plan

Tonya Garcia

Coty Inc. announced a turnaround plan that will incur a one-time $600 million cash cost spread across fiscal years 2020 through 2023. That figure is in addition to about $160 million in previous program costs. The beauty and fragrance company expects to record a $3 billion impairment of its intangible assets, with the final amount to be recorded with its fiscal year 2019 earnings. The turnaround plan will include brand-building efforts including improved assortment and innovation while reducing the "complexity" of the product range, and a new organizational structure that will reduce fixed costs. Coty will create regional commercial teams in the Americas, Asia Pacific, and Europe, Middle East and Africa (EMEA) with marketing units for luxury and consumer beauty. Professional Beauty will remain its own unit with a focus on salons. Fiona Hughes will be named president of consumer beauty brands, Simona Cattaneo will be president of luxury brands, Edgar Huber will be president of the Americas and Asia Pacific, and Gianni Pieraccioni will be named president of EMEA, all effective Jan. 1, 2020. Full-structure implementation and consolidation of management headquarters will be completed by July 1, 2020. For fiscal 2020, Coty expects a "moderating" decline in net revenues. Coty stock rose 1% in Monday premarket trading, and is up more than 104% for the year to date. The S&P 500 index has gained 17.4% for 2019 so far.