Kim Kardashian West Inks $200 Million Deal With Coty

Words by Retail Bum

Kim Kardashian West Inks $200 Million Deal With Coty
Kim Kardashian West Inks $200 Million Deal With Coty

Kim Kardashian West has inked a $200 million deal with Coty Inc. in exchange for 20 percent stake in Karadshian West’s existing beauty business.

While Kardashian West’s beauty business mostly focusses on color cosmetics and fragrances, the licensing agreement goes one step further and covers categories that Kardashian West has yet to enter. This includes skincare, which was the initial focus of the agreement, personal-care products, hair care and nail products.

As part of the deal, Coty Inc. will oversee the development of the portfolio, whereas Kardashian West and her team will lead all creative efforts in terms of product and communications initiatives.

“Partnering with an established organization like Coty will be instrumental in the advancement of my brands as their global reach allows for faster expansion so people around the world are able to experience new launches first hand. This relationship will allow me to focus on the creative elements that I’m so passionate about while benefiting from the incredible resources of Coty, and launching my products around the world.”

– Kim Kardashian West

The scope of this deal is quite similar to the one that Coty signed with Kardashian-West’s half-sister, Kylie Jenner, last November except that Coty claimed a 51 percent stake in Kylie Cosmetics for $600 million.

The current deal values West’s cosmetics company at $1 billion, just slightly lower than the $1.2 billion valuation Coty Inc. put on West’s half-sister Kylie Jenner’s business.

Proceeding to buy minority stake in KKW seems to be a precautionary move given the current state of the global economy caused by the coronavirus pandemic and Coty’s increasing debt. The company is reportedly saddled with billions of dollars in debt from partnering with celebrities with huge social media fan following.

Peter Harf, Chief executive officer of Coty, told WWD,

“This deal is similar to the one that Coty did with Kylie. The only difference is that Coty is taking a smaller position in Kim’s investment vehicle.”

The KKW deal marks the latest step taken by Coty Inc.’s majority shareholder, JAB Holdings, in hopes of turning an unprofitable cosmetics group whose shares have dropped nearly two-thirds since the beginning of the year.

The acquisition is expected to close in the third quarter of FY21.


Update 7/3/20: Kim Kardashian West is not a billionaire. Forbes estimates her net worth at $900 million.

MUST READS
No more posts to show, explore other topics: