The difference between being one of the most recognized people in the world and being one of the most admired is worth around $ 180 million, according to global beauty company Coty. INC.
Coty COTY,
announced Monday a “strategic relationship” in which he paid $ 200 million for a 20% stake in the beauty business of television star Kim Kardashian West, KKW Beauty. Under the terms of the agreement, Coty will be responsible for “portfolio development” in skincare, haircare, personal care and nail products, and Kardashian West “will lead all creative efforts in terms of product and communication initiatives. ”
The investment implies a valuation of $ 1 billion for KKW Beauty.
Coty had revealed earlier this month that he was in talks with Kardashian West about a possible collaboration. The deal comes less than a week after Kim’s husband Kanye West and Gap Inc. GPS
announced a partnership in which Kanye will launch a Yeezy Gap collection next year.
Wells Fargo analyst Joe Lachky said he did not expect the deal to have a material impact on Coty’s finances in the short term, given the small ownership stake, but said it could become “more material” over time. As it includes a license agreement that puts Coty in charge of expanding the brand outside of cosmetics and fragrances.
Coty, COTY,
13.4% soared to $ 4.74. It has lost 57.9% year-to-date, while the S&P 500 SPX index,
it has slipped 5.5%.
Meanwhile, the language at Coty’s launch on Monday was similar to that used in an investment the company closed six months ago with Kim’s younger half-sister Kylie Jenner.
In January, Coty said it closed the “strategic partnership” announced in November 2019, in which Coty said it paid $ 600 million for a 51% stake in Kylie’s beauty business, Kylie Cosmetics.
That implies a valuation of $ 1.18 billion for Kylie Cosmetics.
Do not miss: Coty’s $ 600 million deal with Kylie Jenner is designed to retain her star power on social media.
At the time, Coty said he would be responsible for “portfolio development,” while Jenner “will lead all creative efforts in terms of product and communications initiatives.”
However, there was a not too subtle difference in the language that Coty used to describe the sisters.
Coty said of Kim on Monday:
“Karadashian West is one of the world’s most recognized personalities with 300 million followers on her personal and brand social media channels, as well as being an influential voice among beauty consumers globally,” Coty said in a statement.
In November, Coty said about Kylie:
“Kylie is one of the world’s most admired personalities with more than 270 million followers on her personal and brand social media channels, as well as being one of the most influential voices among beauty consumers worldwide.”
Apparently, being admired is worth much more than being recognized.
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