Coty Buys Majority Stake in Kylie Cosmetics

Shares of beauty giant Coty Inc. (NYSE: COTY) are up about 2% on Monday after the company  announced it will take a majority stake in Kylie Cosmetics. 

The deal, expected to close in the third quarter of fiscal 2020, gives Coty a 51% stake in the makeup company for USD 600 Million. Kylie Jenner, the 22-year-old founder of Kylie Cosmetics, and her team will continue to lead the company’s creative efforts related to products and communications.

Coty will take on the responsibility of expanding Kylie Cosmetics’ portfolio. In addition, it will act as a licensee for skincare, fragrances, and nail products.

“I’m excited to partner with Coty to continue to reach even more fans of Kylie Cosmetics and Kylie Skin around the world,” said Kylie 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.”

Known for nude lip liners and lipsticks, Kylie Cosmetics this spring added a skin-care line. Ulta Beauty Inc. (NASDAQ: ULTA) last year began carrying the makeup at its more than 1,100 stores. Kylie Cosmetics is on track for roughly USD 200 million in sales this year, Coty said.

The success of Kylie Cosmetics is part of a wave of emerging cosmetics lines capitalizing on celebrity founders and social media-driven marketing. As sales of market mainstays like CoverGirl have floundered in recent years, upstarts such as Kylie and Glossier have taken off.