Coty's Strategic Transformation: Can Markus Strobel Deliver a Sustainable Turnaround in a Competitive Beauty Sector?

The beauty industry in 2025 is a landscape of both opportunity and turbulence. For Coty, a company whose stock price has plummeted over 50% in 2025 due to struggles in the mass-market segment, the appointment of Markus Strobel-a 33-year Procter & Gamble (P&G) veteran-as interim CEO and executive chairman represents a high-stakes gamble. The question for investors is whether Strobel, renowned for his role in revitalizing prestige brands like SK-II and managing global beauty portfolios at P&G, can engineer a sustainable turnaround for a company now at a crossroads.

Strobel's Track Record: A Proven Turnaround Artist

Markus Strobel's career at P&G is defined by his ability to transform underperforming brands into growth engines. His most notable achievement was the revival of SK-II, a luxury skincare brand that had languished for years before regaining sustained growth under his leadership. This experience is particularly relevant for Coty, which is evaluating the sale of mass-market brands like CoverGirl and Rimmel to focus on its more profitable fragrance division. Strobel's expertise in prestige skincare and fragrance-where he managed licenses for Gucci, Dolce & Gabbana, and Hugo Boss-aligns with Coty's strategic pivot toward high-margin categories.

Moreover, Strobel's tenure at P&G saw consistent growth across brands, demonstrating his ability to balance innovation with operational discipline. These skills could prove critical for Coty, which under previous CEO Sue Nabi achieved success in fragrance (e.g., the launch of Burberry Goddess) but struggled to replicate that momentum in other segments.

Coty's Challenges: A Market in Flux

Coty's decline in 2025 reflects broader shifts in the beauty sector. The rise of affordable alternatives like Elf Beauty and a slowdown in consumer demand for mass-market cosmetics have eroded margins. Meanwhile, the global beauty industry, projected to reach $590 billion by 2030, is becoming increasingly fragmented. Consumers now prioritize sustainability, ethical production, and performance-driven products, with Gen Z and digital-native brands reshaping demand.

Compounding these challenges is Coty's reliance on a brand portfolio that includes both prestige and mass-market labels. While its fragrance division remains a bright spot, the company's struggles in skin care and cosmetics-segments accounting for 40% of the global beauty market-highlight the need for a sharper strategic focus.

Strategic Initiatives: Can Strobel Navigate the Competitive Landscape?

Strobel's appointment coincides with a strategic review of Coty's consumer beauty business, including potential divestitures. This aligns with broader industry trends: 70% of executives anticipate significant growth in emerging markets like India and the Middle East, while digital platforms such as TikTok Shop are redefining how brands engage consumers. For Coty, leveraging Strobel's experience in digital transformation and brand repositioning could unlock value in both established and emerging markets.

However, success will depend on execution. Strobel must balance short-term cost-cutting with long-term innovation, a challenge given the sector's shift toward value-driven consumption. His ability to replicate the SK-II turnaround-by repositioning Coty's brands as premium yet accessible-will be critical.

The Verdict: A High-Probability, High-Volatility Play

Strobel's track record suggests he possesses the expertise to stabilize Coty's operations and refocus the company on high-growth areas. His experience with prestige brands and digital commerce positions him to capitalize on industry trends, such as the rise of "masstige" (mass-prestige hybrid) products. However, the beauty sector's volatility-exacerbated by economic uncertainty and the rapid rise of challenger brands-means there are no guarantees.

For investors, the key risk lies in whether Strobel can execute a coherent strategy amid a fragmented market. If he succeeds in streamlining Coty's portfolio, enhancing digital engagement, and reinvigorating its fragrance division, the company could regain its footing. But if the broader industry's cautious growth projections materialize, even Strobel's expertise may not be enough to offset structural headwinds.

In the end, Coty's turnaround hinges on a delicate balance: leveraging Strobel's proven leadership while adapting to a beauty landscape where agility and consumer insight are paramount.