Whether she’s promoting her new Holiday Collection on Instagram by wearing a gigantic red bow or layering swatches of brightly-hued lipsticks named after her famous sisters on her forearm, for years Kylie Jenner has dominated the beauty scene with her cosmetics company, Kylie Cosmetics.
Its thanks, in large part, to the success of her eponymous beauty firm that Forbes named the reality star-turned-make-up mogul the youngest self-made billionaire even in 2018, with the then 21-year-old selling an estimated $360 million worth of products from the brand the same year.
So, imagine our shock earlier this week when it was revealed that the entrepreneur has made the decision to sell a majority (yes, a majority) stake of her cosmetics company for $600 million (£463 million).
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The BBC reports that the 22-year-old’s brand – which includes Kylie Cosmetics and Kylie Skin – will henceforth be controlled by global make-up and fragrance brand Coty, in order to – as Jenner puts it – transform the brand into an ‘international beauty powerhouse’.
Coty, which owns brands including Max Factor, Rimmel and Sally Hansen, will have a 51 per cent stake in the company, which was previously controlled fully by Jenner. The deal is believed to be completed in 2020, with the businesswoman keeping a 49 per cent stake in Kylie Cosmetics and staying on as its creative lead on both product development and marketing initiatives.
After all, with over 270 million followers across social media, what company in their right mind would turn down a chance to have Jenner’s reach when it comes to promoting new product launches?
But what does this all mean for Kylie Jenner, her net worth and her fans?
Isa Lavahun, digital brand manager at beauty comparison website Cosmetify.com outlines that the entrepreneur’s decision to sell her majority stake in her company now means that ‘any decision of hers can now be overridden, and she will no longer have the final say on any big business decision’.
While this result may seem at odds with how the Jenners/Kardashians usually conduct their business ventures, Lavahun suggests that Jenner’s decision to sell may result in her making even more money from the brand in the long run.
‘Now worth a whopping $1.2 billion (£930 million), it feels like Kylie has done all she can to grow the business alone,’ she explains.
In fact, according to a statement on Monday from Coty, Kylie Beauty generated revenues of $177 million (£137 million) over the past 12 months — a figure that the company says represents 40 per cent growth over the 2018 calendar year.
In other words, Kylie’s company means even bigger money than was previously imagined both for investors and the entrepreneur.
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‘Her current international reach is limited and global expansion seems like the smartest next move to make - enter Coty,' Lavahun continues. 'As fans outside the US don’t have easy access to Kylie Cosmetics, Coty can bring in their resources, suppliers and contacts to build the business globally, turning it into the next L’Oréal or Estee Lauder.’
For anyone who has ever attempted to buy a Kylie Cosmetics product and suffered the hefty shipping fees, this deal will certainly be a game changer when it comes to improving access, availability and prices for shoppers not based in the US.
‘This is a bold but exciting move for Kylie, most likely to be a good one,’ Lavahun adds.
With Instagram favourite brands such as Beauty Pie and Glossier continuing to rise in popularity, we’re not surprised Coty’s latest business purchase resulted in a five per cent increase in shares on Monday when the news hit the headlines, according to the Daily Mail.
‘It's the power of social media,’ Jenner previously said of the success of her company. ‘I had such a strong reach before I was able to start anything.’
The news comes almost a year after Jenner suggested she couldn’t see herself walking away form Kylie Cosmetics any time soon.
‘Maybe one day [I’ll] pass this on to Stormi, if she’s into it,’ she told Forbes, referring to her daughter’s involvement in her company, adding that she sees herself working on Kylie Cosmetics ‘forever’.
Given the success of Kim Kardashian’s SKIMS shapewear range (which is annoyingly pretty much sold out 24/7) in recent months and the continuing growth of Kylie Cosmetics’ reach in just the last two years, we have a feeling the Kardashians are working towards worldwide dominance of the beauty and fashion industry.
Watch this space.
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Katie O'Malley is the Site Director on ELLE UK. On a daily basis you’ll find Katie managing all digital workflow, editing site, video and newsletter content, liaising with commercial and sales teams on new partnerships and deals (eg Nike, Tiffany & Co., Cartier etc), implementing new digital strategies and compiling in-depth data traffic, SEO and ecomm reports. In addition to appearing on the radio and on TV, as well as interviewing everyone from Oprah Winfrey to Rishi Sunak PM, Katie enjoys writing about lifestyle, culture, wellness, fitness, fashion, and more.
