Puig's decision to withdraw make-up setting spray could hurt cosmetics sales
- Puig's Charlotte Tilbury brand is withdrawing make-up setting spray due to a routine identified quality issue.
- This announcement led to a drop in Puig's shares by as much as 9% in early trading, the lowest since its flotation.
- Despite the withdrawal's negative impact on the cosmetics business, it is not expected to materially affect overall financial performance this year.
In Spain, shares of the premium beauty brand Puig experienced a significant drop on Friday, December 6, 2024, following the company's announcement regarding a quality issue with its Charlotte Tilbury brand's make-up setting spray. The company has stated that routine product testing revealed an isolated quality issue in a limited number of batches, but assured shareholders that the product remains safe for use. Puig, established in 1914 by Antonio Puig Castello, is renowned not only for Charlotte Tilbury but also for owning iconic brands such as Jean Paul Gaultier and Rabanne. This incident marks a notable moment in Puig’s operational timeline, particularly after the company recently went public, raising €2.6 billion (approximately £2.2 billion) in May 2024, marking one of the largest public offerings in Europe this year. After the announcement, Puig's shares initially dropped by as much as 9%, reaching their lowest price since the flotation, though they later recovered to a decline of around 4%. While this withdrawal is expected to negatively affect Puig's cosmetics segment, the company indicated that it would not have a material impact on its overall financial performance for the year. The disclosure reflects the company's commitment to maintaining product quality and consumer safety, despite the short-term financial ramifications of withdrawing a product from the market. As Puig navigates through these challenges, the focus remains on strengthening its brand reputation and operational stability in a competitive market.