Beauty Store Business magazine - January, 2020

Coty Buys Majority Stake in Kylie Cosmetics for $600 Million

Kylie Jenner, founder of Kylie Cosmetics and Kylie Skin, announced her strategic partnership with Coty in order to expand her existing beauty business into a global powerhouse brand. Under the terms of the agreement, Coty will acquire a 51 percent ownership in the partnership for $600M and Jenner will remain the creative leader. Jenner’s brands are two of the fastest-growing and most-engaged beauty brands on social media due to her high following count (more than 270 million followers across her social channels).

Together, Coty and Jenner will set and lead the strategic direction of the partnership, focusing on global expansion and entry into new beauty categories. Jenner and her team will continue to lead all creative efforts and communications initiatives, building on her global reach capabilities through social media.

The transaction is also a key milestone in Coty’s ongoing transformation into a more focused and agile company. Coty will have overall responsibility for the portfolio’s development, leveraging its global knowledge and capabilities in R&D, manufacturing, distribution, commercial and go-to-market expertise, as well as its deep understanding of the fragrances, cosmetics and skincare categories. Coty expects the transaction will boost the net revenue growth of its core fragrance, cosmetics and skincare portfolio by more than 1 percent p.a. over the next three years.

Through the partnership, each party will leverage its unique strengths to further build a high growth, digitally native beauty brand.

Pierre Laubies, Coty chief executive officer, commented, “We are pleased to welcome Kylie into our organization and family. 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.”

“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. This partnership will allow me and my team to stay focused on the creation and development of each product while building the brand into an international beauty powerhouse," said Kyle Jenner.

Peter Harf, chairman of the board, said, “This new partnership between Kylie and Coty is an exciting step in Coty’s renewed emphasis on its beauty business. Kylie is a modern-day icon, with an incredible sense of the beauty consumer, and we believe in the high potential of building a global beauty brand together.”

The acquisition is expected to close in the third quarter of fiscal year 2020. All beauty categories within the new partnership will continue to be sold through leading luxury beauty retailers as well as owned digital channels.

Photo: Courtesy of Instagram.