By Sharon Terlep and Patrick Thomas
Cosmetics maker Coty Inc. is looking to sell its hair-care and professional beauty businesses, a collection of brands that account for nearly a third of its annual revenue.
The makeup and fragrance seller, controlled by European investment firm JAB Ltd., said Monday it is exploring strategic alternatives for more than a dozen brands including Wella and Clairol hair products, and OPI nail polish. Coty also will look to sell its Brazil unit.
The businesses are expected to generate revenues of about $2.7 billion in 2019. Several of the brands were acquired in 2016 when Coty bought much of Procter & Gamble Co.'s beauty business.
The move comes less than a year after Chief Executive Officer Pierre Laubies replaced CEO Camillo Pane, architect of the $12 billion deal with P&G that doubled Coty's size. Since the deal, Coty has struggled with falling sales and integration issues.
Mr. Laubies has said Coty was overly focused on meeting quarterly targets and didn't take the steps needed to shore up the business after the P&G deal proved more problematic than expected. The deal included aging consumer beauty brands such as CoverGirl and MaxFactor, which have fallen out of favor as shoppers switch to higher-end and niche brands.
Selling the businesses won't address the bigger issues facing Coty, Wells Fargo analyst Joe Lachky said. While calling the move a good one on Coty's part, Mr. Lachky said the company has yet to reverse the decline of consumer beauty brands that account for roughly half Coty's business.
Coty said earlier this year it would restructure its operations and take a $3 billion write-down on the roughly 40 brands acquired from P&G. In August, Coty cut ties with Younique, a social-media-driven cosmetics company it took control of in 2017.
Coty said the proceeds from any potential deal would be used to pay down its debt and return cash to shareholders.
Shares of the company were up about 14% to $11.54 in Monday afternoon trading. Before Monday's announcement, Coty shares had lost half their value since the P&G deal closed.
Write to Sharon Terlep at email@example.com and Patrick Thomas at Patrick.Thomas@wsj.com