When Coty CEO Sue Nabi took the reins of the company after helming Kylie Cosmetics and CoverGirl, she became the struggling beauty giant’s fifth CEO in five years. She was the first woman to come from inside the beauty product industry in many years, a background she credits with helping Coty break ground. poor financial performance and returning it to profitability.Thank you for reading this post, don't forget to subscribe!
Nabi is a French native and a rare transgender CEO at a major American corporation. (There is no one else in the Fortune 1,000 besides Nabi, but she has a counterpart in Martine Rothblatt, founder and CEO of biotech company United Therapeutics.) When she became CEO, she inherited a company riddled with debt-ridden problems: Procter in 2016 Coty was greatly weakened after & Gamble’s ill-advised acquisition of most of the beauty business. Additionally, the company had a much smaller roster of high-end products, generally boasted better profit margins, and was a small player in China, lagging far behind competitors such as L’Oréal and Estée Lauder.
The CEO’s predecessors were from the world of consumer packaged goods such as food and household products, an industry where executives are renowned for brand-building. The beauty sector, however, is more about discretionary spending and physical appearance than laundry detergent or bug spray, and previous chief executives missed the subtleties that define success and failure in the industry, Nabi says. . “Intuition is important in our industry. I like to say that intuition is the intelligence that takes shortcuts,” Nabi explains. Luck From Amsterdam in a virtual interview. “I’m really into details. Show me the packaging. What does it smell like? Are you sure that’s the right name for this kind of condition? And I love watching people.”
As CEO of Coty, her early strategies of introducing new products faster, finding new markets for older brands like CoverGirl, and licensing more products in China from big designers like Burberry are working. She has also turned to celebrity-owned brands. In 2021, Coty acquired a 20% stake in Kim Kardashian’s KKW Beauty (now called SKKN), two years after sister Kylie Jenner took a 51% stake in the brand. Both women are now reportedly demanding Coty to buy back their respective stakes. Nabi declined to comment directly on the reports but told Luck “We have very well-established and extremely successful relationships with both teams,” he said in an email.
Nabi’s transformation of the nearly 120-year-old Paris-founded company as a fragrance maker is gaining momentum, Revenue rose 5% to $5.5 billion last fiscal year, and Coty has been profitable for two consecutive years after an extended period of losses. Its debt load has also reduced and shares have almost tripled since he took charge. those green shoots Nabi was dropped at number 87 LuckList of Most Powerful Women in Business 2023.
This interview was edited and condensed for clarity.
Luck: In a bumpy economy, beauty always seems to perform better than other consumer spending areas. Why is the category so flexible?
This is flexible primarily because beauty makes you feel better in general and, therefore, look better, and beauty is the face you show to the world. It’s flexible because it’s the sweet spot between health and looking better. There’s a playfulness and an experiential path to beauty that the health industry doesn’t have, so it’s really the best of both worlds.
Beauty often thrives in times of recession as it becomes a comparatively affordable luxury, but consumers are at a loss. Are they trading down or up in this environment?
People spend on products that they believe will give them the results they expect at any price level. But the marketplace is more competitive than ever, and you need to convince people why they need to pay this pricing level through science, storytelling, superior performance, etc. Plus, they are willing to do so because it is a daily luxury.
For years, beauty companies used celebrities like Britney Spears to launch fragrances. But it stopped because stars put their names on perfume bottles without having anything to do with the product. Is that still the case?
I like to say that people may buy your product once because of your name, but they will only buy it twice or more because of the quality behind it. So it’s both. You need consumer awareness, you need relevance, you need excitement, but that’s just part of the story. The whole story is about building a business that will stand the test of time.
We hear a lot about how Gen Z buyers are different. Does that fall into the beauty category?
The basic things they look for are more or less the same as any older generation. They want high-quality products that deliver on their promises and represent who they are in terms of personality. Where there may be a difference is in how they interact with brands. They want to have one conversation versus a group conversation. They want to believe that a brand embodies inclusivity and sustainability with regard to the ingredients and materials used.
With the proliferation of so many beauty brands, is there pressure on Coty to increase the pace of innovation?
Our metabolism is faster than before. But at the same time, our business is very profitable because we create iconic products that stand the test of time. Some of our fragrances have been in the beauty industry for the last seven years decades, and such products will fund our innovation. there’s a little more novelty In makeup. Makeup is where people love to play, so they’ll buy the latest lipstick when their desired effect is glossy, and then six months later, it’s all about matte lip color. You need to follow the momentum as well to create cash cows.
When you became CEO in September 2020, you were in your fifth position in five years and you also had to deal with the pandemic. How did you reassure the soldiers, help them overcome any crisis?
The first thing I did was hold a town hall for all the employees. I did not make any promise to him. I talked to him about beauty. I wanted to show them that I know this industry and the rules to be successful, while also explaining how brands and products need to be different because we live in a sea of sameness. I told you how passionate I am about beauty. The response was incredible because it was the first time the CEO talked to them not about the P&L, what we need to do next week, next quarter and so on, but rather a vision, a passion and intuition about how what is essential for us spoke about. Business.
You were also the first Coty CEO in a long time to come from the beauty industry rather than CPG. How did that background help?
When you’re passionate about beauty and understand beauty, you can see how small the distance is between success and failure, and it’s a level of nuance that many people outside the industry don’t see. The thing that has helped me a lot since I started 20 or 30 years ago is that I go down to the smallest detail and our business is all about details. I am like a camera that keeps an eye on the people around me.
One of your big goals is to make Coty a big player in China like Estée Lauder and L’Oréal. Are you worried that US-China tensions could impact that?
For everyone in the industry, China is clearly going to become one of the largest beauty markets in the world. This is a country of beauty experts. You don’t have consumers in front of you; You have experts. And it leads the way in terms of quality, transparency and scientific efficiency. We are still small in China, where we only get 4% of our net revenue. It is beneficial if we continue to grow there and our fragrance category is booming in China. And if there is tension, the downside is quite limited.
You studied environmental engineering at university, with a focus on water. How does that training still influence the way you work?
This was extremely useful when I was at L’Oreal, but also today. I collaborate well with people involved in research and development because they know I am a research and development person. In this company, we have some of the most interesting intellectual property in the field [skin] Health protection, which will be very important in a world that is going to get sunnier and warmer.
You are one of the few transgender CEOs in the Fortune 1000. How can we get more transgender people into the C-suite?
I like to say to people, ‘Judge me by what I do, rather than who I am.’ So give a chance to anyone with an idea, passion and desire to create something new. This is the only thing that people should pay attention to because everything else is personal life. Understanding the left and right brain and how men and women think is also instrumental in how I am creating some of the most successful products around the world.
But if some people aren’t open to who you are, they won’t take the time to see what you do. However, I believe that success is the best revenge.
Everyone likes success.
Know the Prophet:
He was born in Algeria with the name Youssef (his middle initial “Y” reflects that name) and was raised and educated in France.
Nabi founded vegan luxury skincare brand Orveda in 2018, which was purchased by Coty in 2021 after becoming CEO.
Nabi rose from sales representative to president of L’Oréal between 1993 and 2013. He is credited with revitalizing Lancôme during the five years he led the brand.
This story originally appeared on Fortune.com