Cosmetics giant Coty Inc is turning to reality TV star Kylie Jenner to bolster its business and win over much needed younger customers.
The company said on Monday it was buying a 51% stake in Jenner’s beauty business, Kylie Cosmetics, for $600 million, valuing it at about $1.2 billion. Coty, the third largest beauty company in the world after L’Oréal and Estée Lauder, will provide the muscle and infrastructure to help Jenner focus on global expansion and enter new beauty categories, while keeping her in charge of creative endeavors and new product development.
“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,” Jenner, who has 270 million followers across social media platforms, said in a statement.
The move shows how Coty is turning to newer names to re-energize its struggling beauty empire anchored by older brands such as CoverGirl and MaxFactor. Investors cheered the deal, sending Coty shares up 4% in pre-market trading.
Jenner, a member of television’s Kardashian-Jenner family, sold her first lip kits in 2015. Kylie Cosmetics’ product lineup now includes many colors, and the product assortment has expanded to include items such as lip glosses, eyeshadow palettes, eyeliner, blushes, bronzers, highlighters, concealers, and makeup brushes. Jenner’s company added a skin care line earlier this year.
Coty said Kylie Cosmetics took in about $177 million in the last 12 months. Last year, the brand got a major boost when Ulta Beauty, which operates roughly 1,100 stores, started exclusively carrying her products, moving beyond only online sales.
For Coty, a publicly traded company controlled by JAB, a European investment firm, the strategy is to get back on track with rising names. In 2016, the company bought dozens of brands from Procter & Gamble, many of them stagnant, but has failed to revitalize them as it had had hoped. Earlier this year, it took a $3 billion write down on the P&G deal, and Coty is trying to sell off its hair care and professional beauty business.
