US-headquartered fragrance giant Coty will outsource its distribution to a third party in the hope of cutting costs.
The company announced its decision to employ a third party to take on all of its North American distribution last week following what it referred to as a ‘detailed review’ of its network strategy.
This will result in the loss of 99 jobs at its North Carolina facility in Rocky Point.
Coty cited the difficult economic situation as a reason behind the decision, but said it would support employees in finding new positions.
“This was a very difficult decision for us, but Coty’s commitment to its employees is steady. During this time, we will do all that we can to help our employees transition to other opportunities, which remains our primary concern,” Cary Newman, Rocky Point General Manager said.
Rocky Point sale falls through
The majority of employees at the Rocky Point facility are involved in manufacturing, not distribution, but these jobs are also in jeopardy as the proposed sale of the facility has fallen through.
Talks with contract manufacturer Medicia over a potential purchase of the site have not been successful, although Coty maintains it is still looking for potential buyers.
“In the meantime, Coty is continuing to look for a new buyer of the Rocky Point plant in order to preserve the majority of jobs and keep the facility operational,” the company said in a statement.
However, if a buyer cannot be found the manufacturing facility will be closed and the remainder of jobs cut, a spokesperson for the company confirmed.
Del Laboratories acquired in 2007
Rocky Point came into Coty’s hands when it acquired cosmetics manufacturer Del Laboratories in 2007, along with a distribution center in Leland and a manufacturing and distribution center in Barrie, Canada.
The acquisition was an attempt to strengthen Coty’s presence in the color cosmetics and nail care sectors.
However, Rocky Point is not the only one of the Del facilities that the company has been trying to shed. May last year saw announcements of the closure of its Leland distribution facility which had served as a processing center for customer returns and promotional products.