Coty’s $600m Kylie Cosmetics Bet Has Analysts Nervous, But ‘We Don’t See Weaknesses,’ CFO Says
Coty is confident that it can build Kylie Cosmetics into a global powerhouse. However, some analysts have misgivings about the firm’s heavy investment in a celebrity brand, questioning whether its success could be a fad and noting Coty’s “poor track record” with acquisitions overall.
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Shareholders and market analysts have been watching for Coty’s next Kylie Cosmetics play following the firm’s $600m deal in 2019 for a majority stake in the celeb’s highly followed makeup and skin-care business. More cosmetics news in brief.
Sue Nabi, who started as CEO at Coty in September, believes the company can do better than CoverGirl’s previous relaunch, which championed individual expression with the somewhat head-scratching tag, “I Am What I Makeup.” The brand’s future is in “clean,” she suggested during Coty’s first-quarter earnings call.
Coty will leverage Kim Kardashian West’s influence with her roughly 300m social-media followers as it expands her KKW brand into new product categories and geographies, according to the firm’s 29 June announcement. The $200m transaction for 20% of the celeb’s business follows a $600m deal with half-sister Kylie Jenner, completed in January.