Date
25 September 2017
Coty will work with Li & Fung to distribute some of its mass market lines on the mainland. Photo: Bloomberg
Coty will work with Li & Fung to distribute some of its mass market lines on the mainland. Photo: Bloomberg

Coty ditches TJoy as China losses get ugly

French beauty firm Coty Inc. will stop selling its TJoy Chinese skin care brand due to heavy losses, National Business Daily reported Thursday, citing a company announcement.

Coty bought the company in 2010 and had hoped TJoy’s existing distribution channels would give the French firm a solid foothold in the country. But TJoy sales fell by as much as half in 2012, undercutting Coty’s profitability.

As of March 31, Coty had amassed US$253.3 million in losses in the first three fiscal quarters due to the write-off of TJoy’s skin care operations, which stood at US$316.9 million, it said.

Coty said it has reached a deal with Li & Fung (00494.HK) for the Hong Kong-listed company to oversee mainland distribution of some of Coty’s mass market lines, including Adidas, Rimmel and Playboy.

A number of foreign cosmetics firms, including L’Oreal SA’s Garnier and Revlon Inc., have pulled out of the Chinese market this year because of falling sales.

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