Kylie Cosmetics bought for $600m as Coty banks on Instagram to revive sales

Ben StevensNews Social Media

Coty has purchased a controlling stake in Kylie Cosmetics as the struggling beauty brand banks on social media to revive its fortunes.

Kylie Jenner’s beauty brand has sold a 51 per cent stake to Coty for $600 million (£463 million) giving the business a rough valuation of $1.2 billion (£930 million).

This marks the latest milestone in the beauty industry’s dramatic shift towards social media as a sales tool, but still represents gamble for Coty which has a rocky track record with acquisitions.

Coty is currently in the middle of a four-year restructuring plan following several years of dismal trading and more than a 60 per cent drop in its share price since August 2016.

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A year later it purchased a 60 per cent stake in Younique for $600 million, which it was forced to sell in August this year for just $78 million.

It has also struggled to integrate the 43 brands it purchased from Procter & Gamble for a whopping $12.5 billion in 2016.

However this acquisition is its first aimed at tapping into the increasing power of influencers to sell beauty products, especially to younger generations.

“With a single social media post, Kylie is able to reach double the number of people who watch the Super Bowl every year, and she is the seventh-most followed person on Instagram,” Coty’s chief executive Pierre Laubies said.

Coty’s chief financial officer Pierre-André Terisse added: “This exposure to much younger consumers is something currently lacking in Coty’s portfolio.”

Terisse expects the deal to add “more than one per cent” to annual net revenue growth over the next three years and boost its earnings per share in just one year.

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Ben StevensNews Social Media

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