Kylie Jenner Selling Kylie Cosmetics: Power Move or Saving From Going Under?
Kylie Jenner, who has gained stardom from Keeping Up with the Kardashians with her family, has consistently made her name for herself with her strong online presence, furthering the creation of her cosmetics in 2015. Originally named Kylie Lip Kits, Jenner was only 18 years old when she launched the business ( young entrepreneur!). So, in 2019, Forbes named her as the youngest self-made billionaire in history.
In the first 18 months of service, Kylie Cosmetics reported sales of USD 420 million. Since then, she has invested herself in eye shadow palettes, lipsticks, skincare, and other cosmetics. The company began its multi-channel approach in 2017 when it opened its first LA pop-up store. Kylie Cosmetics is now available in more than 1,000 Ulta stores across the United States as well as via its e-commerce website.
Forbes projected the company to be worth USD 800 million in 2018; it is estimated to be worth USD 1.2 billion in May 2019. The goal of the sale is to diversify the brand and turn Kylie Cosmetics into a ‘global beauty powerhouse.' The Chairman of Coty Beauty, Peter Harf, acknowledged that Kylie Jenner is a' classic icon, with an unparalleled sense of beauty to the customer.'
Fifty-one percent of the makeup brand, Kylie Cosmetics, and Kylie Skin, have been acquired by Coty for a $600 million contract. Although it will still have a major stake in what goes into the brand, its name, and design, etc., Coty will have the majority control over the company.
vintage Coty ad via Distractify
Coty is an American health and beauty company, founded in 1904. As of 2018, it owns 77 brands that fall under the categories of fragrances, cosmetics, skincare, nail care and both professional and consumer hair care.
Is this a smart business move? Of course. Kylie Cosmetics is still selling well throughout the younger generation (Young Millennials and Gen Z). Kylie Cosmetics reported revenue of USD 360 million in 2018. Some Gen Z shoppers turn away from heavy beauty shopping and turn their attention to skincare. Of course, Kylie Jenner also has a skincare line–introduced in 2019 and received backlash for some of the items in the range. One product, in particular, the walnut scrub, caused a stir as the ingredients could further damage the skin rather than enhancing it.
via Skin Spa Med
Moreover, since its inception, there have been quite a few controversies surrounding Kylie Cosmetics. From a set of brushes priced at $350 USD and considered not worth the price tag to a lack of diversity in its covert range, the company has seen its fair share of scandals since its launch. With sales to Coty, it could streamline the process of creating products to ensure that they are compatible with Coty's principles and guidelines. Coty is also the founder of the likes of Wella, Clavin Klein, Rimmel, Burberry Beauty, and Max Factor.
According to Time Magazine, Coty hasn’t really had a choice but to change the business strategy of their company. Kylie Cosmetics is the first brand that they used to change its strategy and has said in a statement that this is a ‘key milestone’ for the long run. The majority of the acquisition of Kylie Cosmetics by Coty will take place next year. It’s safe to say that Kylie will forever acquire generational wealth.
cover image via Daily Mail UK
