Coty eyes digital growth with majority purchase of Kylie Cosmetics
International beauty brand Coty today (18 November) has bought 51% of Kylie Cosmetics for $600m, a move to drive digital growth for its core beauty business.
Around half of Kylie Cosmetics revenue comes through DTC channels
Coty will lead manufacturing, distribution, commercial and go-to-market strategies for the Kylie Cosmetics portfolio, while Kylie Jenner and her team will lead creative efforts in product and communications areas.
Coty is buying the digital-first beauty brand after launching a strategic review of its professional beauty division, associated hair brands and Brazilian operations, while also announcing intentions to re-focus around core fragrances, cosmetics and skincare businesses.
“This new partnership between Kylie and Coty is an exciting step in Coty’s renewed emphasis on its beauty business,” said Peter Harf, Coty chairman of the board. “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.”
Kylie Cosmetics revenue estimate over the last twelve months is $177m. Half of that comes via direct-to-consumer channels, according to a Coty investor presentation.
Coty hopes that acquiring the digitally native beauty brand with expand its presence in premium cosmetics and skincare both domestically and overseas.
Over half of Kylie Jenner’s 270 million social media followers are outside of the US. Coty hopes to leverage its existing operations in North America, Europe and China to further grow the Kylie brand.
“I’m excited to partner with Coty to continue to reach even more fans of Kylie Cosmetics and Kylie Skin around the world,” said Jenner. “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.”
The deal is expected to close in the third quarter of fiscal year 2020. Coty expects to see a return on investment by 2023.
“We are pleased to welcome Kylie into our organization and family,” said Pierre Laubies, Coty chief executive officer. “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.”