Coty Plans To Buy Controlling Stake In Kylie Cosmetics

As part of a wave of fledgling cosmetics lines capitalizing on social media and celebrity founders, Kylie Jenner’s Kylie Cosmetics is on pace for approximately $200 million in sales this year. Coty Inc. is now paying $600 million for a controlling stake in the firm as it bets that the celebrity’s brand can rejuvenate a struggling beauty business based on MaxFactor and CoverGirl, The Wall Street Journal reported.

Coty Finance Chief Pierre-André Terisse said, according to the outlet, “This is where the growth of the market is.” He also noted that the brand is attractive for its online presence as well as its skincare business. The cosmetics and fragrance firm reportedly plans to buy 51 percent of Kylie Cosmetics.

The youngest of the five Kardashian-Jenner sisters, Kylie started the brand in 2015. She will continue to be the public face of the brand, which will take on the name Kylie Beauty. Kylie Cosmetics added a skincare line this spring and is known for its nude lip liners and lipsticks.

Coty is controlled by JAB Ltd., a European investment firm, and has grappled with executive turnover and weak sales. The news comes as Coty Inc. is making an about-face, years into a turnaround that hasn’t yet taken hold. The firm is doing away with a revival plan set on bringing out new products as well as adding businesses, focusing on a new strategy to downsize, cut back on debt and turn back a failed makeover of one of its most sizable, best-known brands.

The fragrance and makeup seller has floundered after acquiring many beauty brands in 2016 from Procter & Gamble Co. (P&G). Its stock has shed half of its value as of the arrangement, and the firm took $4 billion in write-downs on the P&G businesses as it grappled with digesting the brands and as drugstore staples such as CoverGirl and Max Factor fell more out of favor.