Coty chair, CEO may exit as owner JAB plans leadership shake-up, FT reports

By Juveria Tabassum and Neil J Kanatt

Dec 12 (Reuters) - Coty's COTY.N controlling shareholder, JAB Holding, is planning a leadership overhaul at the beauty company that could result in the exit of its board chair and CEO, Sue Nabi, the Financial Times reported on Friday, citing people familiar with the matter.

The cosmetics retailer has struggled over the past couple of years to drive sales at its mass beauty category as it fights heightened competition from newer brands. Its shares have cratered 73% in the last two years, and were down 3% on the news.

In September, it launched a review and mulled a sale of the unit that houses brands such as Rimmel and Max Factor, to help cut debt and focus on its better-performing premium fragrances business.

"The news would be unsurprising given the headwinds facing Coty which place remarkable pressure on execution," said Ana Garcia, analyst at CFRA Research.

However, the company's troubles were more a result of increased competitiveness and the recent deceleration in the beauty market, which would continue to erode Coty's sales despite any leadership changes, Garcia added.

Coty is also set to lose its exclusive license for Gucci fragrance and beauty products from 2028 after the latter's parent company, Kering PRTP.PA, agreed to sell its beauty business to L'Oreal OREP.PA.

The Financial Times also reported, citing three people familiar with the matter, that Coty CEO Nabi turned down substantial financial offers from L'Oreal to end the Gucci license early.

JAB's push for leadership overhaul would first lead to the exit of board chair Peter Harf, and a new chair would soon find a replacement for Nabi, the report added, citing the people.

JAB declined to comment, while Coty did not immediately respond to a Reuters request for a statement on the report.

Coty would join a long list of leadership changes at global consumer companies as they navigate an increasingly divergent spending pattern spurred by macroeconomic uncertainties.

"It is interesting that these announcements are happening in quick succession. It seems like the boards are making their 'New Year, New Me' resolutions early," said Brian Jacobsen, chief economic strategist at Annex Wealth Management.

"Perhaps there's some displeasure with how they navigated the rough patches, so they want someone else for the good times," he said, adding that 2026 could present a more favorable environment for consumer companies.

On Thursday, yoga pants-maker Lululemon LULU.O announced the exit of CEO Calvin McDonald as it tries to revive demand in the United States. The Wall Street Journal reported, citing sources, that Lululemon's founder, Chip Wilson, was considering a proxy fight over board changes.