Beauty behemoth Coty and Spanish fragrance firm Puig have decided to end their distribution agreement in the US after a six year partnership.
The decision was reached by both parties and will mean they will not renew their partenership which expires June 30, 2013.
Both firms say the decision is an amicable end to their partnership, during which Coty has significantly expanded the market presence for Puig fragrances; and will now allow Coty to focus fully on its own brands, and Puig to pursue further growth in the North American market.
"After the strong and collaborative partnership Coty has enjoyed with Puig over the past six years, we are now at the stage where we need to fully focus on our own portfolio, which has grown bigger and stronger over the past years," said Michele Scannavini, CEO, Coty Inc.
"We are all proud of the great work we've done and results achieved with the Puig business, and we wish the company continued success in the future."
As a result of this decision, Coty Prestige will assume selling responsibility for the Coty Beauty brands that are distributed in Prestige retailers, which are currently sold by a third party distributor.
"Puig is very appreciative of the support and the very positive results of the collaboration with Coty in the U.S. and Canada over the past years," said Marc Puig, chairman and CEO of Puig.
"Our business has more than doubled during this period. As a result the time has come for Puig to redefine a new approach to pursue growth in the North American markets."
End of an era
Six years ago, Coty developed an established relationship with Puig as one of its distributors of choice in overseas markets.
Coty distributed a number of prestige brands, such as Prada, Nina Ricci, Carolina Herrera and Paco Rabanne, for Puig in the United States and Canada.
Through this agreement, both parties profited from the other, allowing Coty to build its portfolio to the point where it wishes to focus fully on its own brands; and helped Puig expand its strategic initiative for its mass brand’s business.