The success cannot be denied for Kylie Jenner. The american multinational of beauty products, Coty announced on Monday that it was preparing to buy a 51% stake in the company of the young woman, which includes Kylie Cosmetics and Kylie Skin, for an amount of $ 600 million. The transaction values the company to the tune of $ 1.2 billion, confirming the status of billionaire Kylie Jenner.
The transaction is expected to be completed in the third quarter of 2020. Kylie Jenner will then retain 49 % of the units of Kylie Cosmetics and will remain in charge of the creation in terms of product development and marketing, in particular social networks, where it accrues a total of 270 million followers.
Coty, the parent company of Covergirl, and Sally Hansen, seeks to appeal to a younger audience, ” said Pierre-André Terisse, chief financial officer of Coty, on a telephone call. Kylie Cosmetics is the second largest brand in the most followed on Instagram, which means that Coty will join the clan of the lines of beauty more present on the social networks, such as Anastasia Beverly Hills and Glossier, which have become popular in recent years.
Kylie Jenner was said to Forbes in 2018 : “It is the power of social networks. I already had a great influence before you start anything “.
The young woman had become the youngest billionaire self-taught in the month of march. She founded her cosmetics company in 2015, at the age of 18 years, with the money she has earned as a fashion model. Thanks to social media, his collection of lip kits (consisting of a lip pencil and a lipstick) is a cardboard box. With very little overhead (last year, it had seven full-time employees) and almost no cost of marketing (almost everything is done on its own social networks), the company is profitable right from the start.
In the years that followed, Kylie Jenner develops and launches of palettes of eye shadows and eye-liners, among others. In August 2018, she signed an exclusive distribution agreement with the string of american beauty Ulta, marking its first step in the large-scale distribution.
According to the information of Kylie Comestics, Forbes considered the beginning of 2018 the turnover of the company at $ 360 million. But according to a press release of Coty released on Monday, Kylie Beauty has in fact generated $ 177 million in the last 12 months (a figure which represents, according to a presentation to investors, a growth of 40 % compared to the calendar year 2018). The EBITDA margin of the company is greater than 25 %.
When Forbes interviewed Kylie Jenner last year, the young woman did not seem willing to sell his brand : “maybe one day I will pass the torch to Stormi, if there is interest “, she had said was about his daughter, and adding that she was planning to work with Kylie Cosmetics ‘ forever “.
Coty hopes to be able to count on the influence of the young billionaire to develop Kylie’s Beauty to the international. In fact, more than half of the followers of Kylie Jenner is outside of the United States, while the vast majority of sales of Kylie Beauty is done in addition to-Atlantic. Coty has manufacturing facilities and distribution channels in the world and is likely to work also to develop the brand of Kylie Jenner in the sector of fragrances, an area where her sister, Kim Kardashian-West, has already taken a position. Coty expects that, by 2023, its return on invested capital will exceed the purchase price of us $ 600 million.
Pierre Laubies, CEO of Coty, said in a statement : “Combine the creative vision of Kylie and the interest of consumers with the expertise and leadership of Coty in beauty products, prestige is a new and exciting step forward in our transformation that will allow us to leverage our core strengths in perfumes, cosmetics and skin care, which enable brands to Kylie to develop their full potential “.
Coty made the bet that Kylie Cosmetics is not just a fad, despite the addiction to the social networks of its founder. The company pointed out that more than 50% of sales of products of skin care are made by regular clients, and says that sales of beauty products are just as impressive. If the partnership succeeds, it will be a victory valuable for Coty, which has seen its shares fall by more than 50% since the acquisition of a number of companies of cosmetics and fragrances Procter & Gamble (including CoverGirl and Clairol) in 2016.