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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