The dough is continuing to roll in for Kylie Jenner! In a surprising move, Jenner has officially sold off a majority stake in her popular beauty brand, Kylie Cosmetics, for a whopping $600 million. However, there’s a master plan behind the major power move.
A Huge Decision
Jenner, who was previously the full owner of the company, is set to sell 51% of her stake in Kylie Cosmetics to Coty, Inc. Based in New York, Coty is a cosmetics company that owns multiple international beauty brands, including CoverGirl, OPI, Rimmel, Marc Jacobs, GHD and Clairol. Before this deal, Jenner held 100% ownership of the independently-funded company. The sale will value the company at almost $1.2 billion.
In a press release from the company, it was stated that this partnership will allow Kylie Cosmetics to grow across the globe and enter into new categories in the beauty industry. Though Jenner is no longer the majority owner, she will stay on board to focus on the development and creative side of the products alongside her team. “I’m excited to partner with Coty to continue to reach even more fans of Kylie Cosmetics and Kylie Skin around the world. I look forward to continuing the creativity and ingenuity for each collection that consumers have come to expect and engaging with my fans across social media,” Jenner said in the release.
Since its launch in 2015, Kylie Cosmetics has soared to become a multi-million dollar company. It’s currently valued at $900 million. The beauty brand began as Kylie Lip Kits, which had a matte liquid lipstick and lip liner pencil for consumers. In the first 18 months, the company generated $420 million in revenue.
Kylie Cosmetics has hosted pop-up events across the country at Topshop and the company products are now being sold at Ulta Beauty. Jenner also collaborated with several people for special makeup collections, including her sisters Kim Kardashian West, Khloe Kardashian, and Kourtney Kardashian. The beauty mogul recently launched Kylie Skin to help consumers with their skincare routine. Jenner and her team have effectively used the power of social media to make Kylie Cosmetics into a huge, respected company in the beauty world.
The acquisition is set to officially close in mid-2020. Coty has made it clear that all of Jenner’s current beauty products will continue to be sold through luxury beauty retailers and the owned digital channels. The company is optimistic that Jenner’s social media-driven marketing strategy will continue to drive success, something that other major beauty brands have not been able to do in recent years. Together, Coty and Jenner will focus on global expansion and entry into new beauty categories, which will potentially include nail polishes and fragrances. “Combining Kylie’s creative vision and unparalleled consumer interest with Coty’s expertise and leadership in prestige beauty products is an exciting next step in our transformation and will leverage our core strengths around fragrances, cosmetics, and skincare, allowing Kylie’s brands to reach their full potential,” said Coty CEO Pierre Laubies.
The move appears to be in Jenner’s favor as well, as she reportedly felt that she and her team had taken the business as far as it could go on their own. Though Kylie Cosmetics is huge in the United States, the company’s international reach is limited. Jenner’s momager, Kris Jenner, weighed in on the big decision, stating that her daughter wants to focus on the business and pass it along to her daughter Stormi one day. “I think the goal is to just keep building Kylie’s existing beauty business into a global powerhouse brand. That’s the vision,” she said in an interview with CNBC’s Squawk Box. “And we decided to partner with Coty because they share the same vision that we do in building this into a huge thing. We dream big, and this is something we’re so excited about.”
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