Coty, which also owns Max Factor and Sally Hansen, has bought a 51% stake in Kylie Jenner Cosmetics. She sold a share of her cosmetics business to CoverGirl owner Coty. However, the purchase price for the reality TV star's company is already around $1.2 billion. Coty said Monday it would pay $600 million for a 51 percent stake in Kylie Cosmetics.
Kylie Jenner collects a huge sum again
There are plans to launch more products under the Kylie brand and sell them in more countries around the world. The deal is expected to close early next year. The influencer, who is a part of the reality show family “Keeping Up withthe Kardashians” was, founded her company in 2015 and leveraged hundreds of millions of social media followers to promote her popular lip liners and liquid lipsticks. The 22-year-old is the youngest sister of Kim Kardashian West and will continue to be the face of the brand and help develop new products.
“Kylie is a modern icon,” said Peter Harf, chairman of Coty. But the company also hopes the celebrity-backed store can help increase sales and connect with younger shoppers under 35. This is a group that traditional makeup brands have struggled to cater to. Coty's other brands, including Max Factor makeup and Sally Hansen nail polish, have been around for decades. Wendy Nicholson, an analyst at Citi Research, said the deal could help Coty become a “faster growth company.” But she also contends that a brand associated with a celebrity carries risks, such as the possibility that Jenner's popularity will wane.
After success on Instagram
Coty said Monday that Jenner is "not a fad," citing her brand's growing sales and social media following. Kylie Cosmetics had sales of around $177 million last year. This is an increase of 40 percent compared to the previous year. And the brand's Instagram followers are growing by 7,000 every day. Jenner's products were only sold online when they first hit the market. However, last year the brand inked a deal to sell its wares in 1,100 beauty stores. Kylie Jenner expanded her wealth worldwide this year with Kylie Skin. This is a range of eye and moisturizers, as well as facial scrubs. “I’m excited to work with Coty to reach even more fans of Kylie Cosmetics and Kylie Skin around the world,” said the young entrepreneur.
