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(Reuters) – Coty Inc., the parent company of CoverGirl, announced on Friday its decision to divest its 20% stake in the beauty brand associated with reality TV personality Kim Kardashian, transferring ownership to her clothing line, SKIMS. This strategic move aims to unify both businesses under a single branding strategy.
Coty originally invested in Kardashian’s beauty venture, SKKN, in 2021. The funds generated from this divestiture are intended to alleviate debt and foster advancements within Coty’s wider array of brands.
The New York-based cosmetics company has been facing challenges in enhancing its sales figures, primarily attributed to cautious consumer spending amid prevailing inflationary pressures.
In light of these difficulties, Coty recently revised its annual profit projections downward and reported an unexpected decline in quarterly revenue. This situation mirrors trends seen in its competitor, Estee Lauder, which also experienced sales setbacks due to diminished performance in the Asian travel retail sector.
Anna von Bayern, who leads both Kylie Cosmetics and Kim Kardashian’s beauty line at Coty, indicated that the company remains committed to its partnership with the Kylie Cosmetics brand.
In a notable development, it was reported in 2023 that Kardashian was engaged in discussions with Coty regarding the potential reacquisition of a minority stake in her beauty brand as part of strategies to broaden SKKN’s product range.
Coty has not disclosed the sale price for its stake in Kardashian’s beauty brand and has yet to respond to inquiries from Reuters regarding this transaction.
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finance.yahoo.com