Unilever sells its perfumes business to Coty of the US

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The Independent Online

Unilever has sold some of the world's most glamorous perfume brands, including Cerruti, Calvin Klein and Chloe, to the US company behind the David and Victoria Beckham fragrances in a $800m (£440m) deal.

Unilever has sold some of the world's most glamorous perfume brands, including Cerruti, Calvin Klein and Chloe, to the US company behind the David and Victoria Beckham fragrances in a $800m (£440m) deal.

Unilever's perfumes business has been on the market for nearly three years. In 2000 Unilever sold its Elizabeth Arden cosmetics and fragrance business for a loss to FFI Fragrances of the US.

Yesterday the Anglo-Dutch consumer goods giant completed its withdrawal from the fragrances market by selling its Unilever Cosmetics International division to Coty, the New York-based cosmetics and perfumes business.

Coty is most famous for its celebrity-endorsed scents, which include the Jennifer Lopez-backed Glow by JLO and a perfume endorsed by the Sex and the City actress Sarah Jessica Parker.

Unilever will receive $800m in cash for the assets, with the opportunity for further payments dependent on sales of the brands. The company has been slimming down its brands portfolio in both foods and personal care and is focusing on a smaller number of core global brands.

The perfumes it is selling had combined sales of $600m and will now become part of Coty's prestige division, Lancaster Group Worldwide. Coty has sales of $2bn, most of which come though its mass market division Coty Beauty, that signed up the Beckhams this year.

Run by the chief executive Bernd Beetz, Coty has embarked on an ambitious growth strategy since 2001. "Over the last several years, Coty's success with fashion, celebrity and lifestyle fragrances has enabled us to grow when most of our industry has been flat or shrinking. We are now entering a new phase in which we will greatly expand our presence in the market for prestige and ultra-prestige brands on a global basis."

The business being sold by Unilever includes the perfume licenses for the fashion brands, which include Vera Wang and Lagerfeld, and the manufacturing and distribution centre in New Jersey. It also includes a European distribution centre in Lille, France.

The Unilever division employs 1,300 people, of which just 25 work in the UK. The workforce will transfer to Coty.

Patrick Cescau, the chief executive of Unilever, said: "This is an excellent strategic move for Unilever and one that is fully in line with our strategy to focus on our core categories."

After putting the perfumes on the market in August 2002, Unilever struggled to sell them because of the impact on the market for luxury goods and perfumes of the 11 September 2001 terrorist attacks.

Unilever will now focus on trying to restore sustainable sales growth after expansion stalled last year. Under Niall FitzGerald, Mr Cescau's predecessor, Unilever embarked on the Path to Growth strategy which radically restructured the business to make it a more efficient organisation.

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