Coty hopes that the new office in Moscow will strengthen the company’s global presence. Before this, Coty products were sold in Russia through multiple distribution partnerships but this now allows the company to work more directly in the Russian market.
Effective immediately, the new subsidiary will manage the marketing, sales and distribution of select Coty products, including Rimmel colour cosmetics, Adidas, Chloe and Calvin Klein fragrances.
“The opening of Coty’s Russian subsidiary provides Coty with a competitive in-market edge to advance our sales and build partnerships while simultaneously strengthening our global presence in the beauty industry,” said Coty Chief Executive Officer Bernd Beetz.
Leveraging existing partnerships
He added, “Coty’s Russia team will leverage existing relationships and establish new partnerships with distributors in Russia and related markets to deliver the highest quality products to consumers”.
The Russian market, along with China, has been widely regarded in the industry as a strong area of growth. Coty has said that “the sustained success of Russia’s nearly $8 bn cosmetics and toiletries industry positions the country as a key emerging market and priority expansion opportunity for Coty”.
However, more recently there have been concerns that the economic recession has hit Russia particularly badly and there have been tell-tale signs that the cosmetics industry has been affected. L’Oreal admitted tensions with one of it’s major Russian suppliers earlier this year, because retailer L’Etoile was struggling to pay, according to Reuters news agency.
Downturn hits cosmetics industry
“Today many Russian retailers are suffering from liquidity problems and this could of course impact our sales”, L’Oreal General Secretary in Russia, Georges Chichmanov told Reuters News. A spokesperson from Coty was unavailable to comment on the economic situation in Russia at the time of publication.
In addition, Coty has announced the new General Director of the Russian subsidiary as Roman Terekhov, who will be leaving his role as Beauty & Co. General Manager and Commercial Director to assume his new position in Russia. He will be overseeing the day-to-day operations of 60 employees in marketing, sales, sales supply chain, finance and IT departments.