On the eve of a deal to acquire one of the hottest new names in makeup, the directors of beleaguered beauty giant Coty Inc. some unconventional concerns.
Will sales drop if the CEO decides to have another child? Can a 22-year-old social media star reliably stay out of trouble? What role will her mother play?
Last year, Coty came up with a plan to pay $ 600 million for a majority stake in the cosmetics startup founded by ‘Keeping Up with the Kardashians’ star Kylie Jenner, a move aimed at reviving a beauty business that relies on is from drugstore products such as Cover Girl and Max Factor.
Coty’s executives ultimately decided that Kylie Cosmetics’ statistics – $ 200 million in annual revenue with less than a dozen employees and virtually no ad spend – outweighed their concerns. Also compelling were the reassurances of Mrs. Jenner’s mother, Kris Jenner, who helped start the company in 2015 and led the negotiations.
A year after closing the deal, Kylie Cosmetics has both strengthened its new parent company and dealt a few blows, though the company had not initially foreseen.