Kylie Jenner Sells $600 Million Stake in Beauty Line to Coty

Good news for Kylie, on the face of it, this confirms her billionaire status. Not bad for a 22 year old.

I don’t know the economics of the business but it sounds like a lot of money and they don’t have a great history of making successful acquisitions -

Coty has been under pressure to turn its business around, having taken a $965 million writedown this year on brands it bought from Procter & Gamble in 2015.

Kylie Jenner Sells $600 Million Stake in Beauty Line to Coty - Bloomberg

Seems like a risky move to me to. Buying a brand that is build on the cult of celebrity seems to have a relativity low likelihood of a long life. Once the fame of the celebrity wanes, so will be the brand that is associated with that particular name. It’s like buying into a hype. It would be more sensible to buy brands that are not so closely aligned to a single person.

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Agreed, it’s a lot of pressure to put on her shoulders and even if she doesn’t make a silly mistake, it could be a Kanye vs Swift type situation that tarnishes her brand. Having said that, she benefits from being part of the larger Kardashian brand, which means her sisters will support her and help smooth over any issues. Plus there’s the much more experienced (& I suspect, the mastermind) of this, Kris Jenner, who I’m sure will be very involved.

Here’s a really good summary of the leverage that she has that’s enabled her to build this business in 4 years. Plus why it’ll be so hard for others to replicate, from Alphaville.

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