Kylie Jenner a game-changer for this company? Check out whopping $600 million deal
CoverGirl parent Coty announced on Monday that it is paying $600 million for 51 per cent stake in reality star Kylie Jenner's four-year-old beauty business.
CoverGirl parent Coty announced on Monday that it is paying $600 million for 51 per cent stake in reality star Kylie Jenner's 4-year-old beauty business. A well-known brand in the cosmetic world, Coty is seeking to target the GenZ shoppers and its strategy for that is to pay $600 million to have long-term strategic partnership with Kylie Jenner, reported Forbes. Kylie Jenner has 270 million social media followers and Coty seems to have aimed at those followers as its potential market.
So far, it seems that the Coty move has started to pay dividends as its share price rose 5 per cent immediately after the announcement of the Coty-Kyle Jenner partnership.
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Announcing the strategic partnership with Kylie Jenner, Coty said on Monday that the premium cosmetic company expects the transaction to add to the sales growth of its core fragrance, cosmetics and skincare lines by more than 1 per cent per annum over the next three years. Kylie Cosmetics generated $177 million in sales the last one year, Coty said, adding that it has plans to expand the makeup brand across skincare and fragrance categories and to international markets. Pierre-André Terisse, CFO at Coty said that Kylie Jenner “is going to set the foundation for a global beauty business,” adding the move will help Coty to attract Gen Z audience which currently lacking in Coty's portfolio.
Kylie Jenner began her beauty business in 2015 with lipsticks and lipliner kits. Jenner's beauty kits were sold out within minutes of launch that reflected an early sign of the social media power that Kylie Jenner could translate in business. By paying $600 billion for 51 per cent stake in Kylie Jenner's beauty brand, Coty has valued her company at $1.2 billion. The Coty-Jenner deal is expected to close in Q3FY20 means the third quarter of the fiscal year 2020, Coty said.