Challenges and Strategies in the Battle for Ownership
In the ever-evolving world of celebrity business ventures, Kylie Jenner and Kim Kardashian are embroiled in a complex battle to reclaim ownership of their respective companies from Coty Inc., a move that could reshape their entrepreneurial futures.
Approximately four years ago, Kylie Jenner skyrocketed to the status of a self-made billionaire by relinquishing a 51% stake in her flourishing venture, Kylie Cosmetics, for a staggering $600 million. The triumphant buyer, Coty, forms part of the formidable German conglomerate JAB, boasting ownership of renowned brands such as Krispy Kreme, Einstein Bagels, Peet’s Coffee & Tea, Panera Bread, and an array of other esteemed consumer goods companies.
In 2020, Coty extended its reach further by securing a 20% stake, valued at $200 million, in Kim Kardashian’s skincare line, SKKN by Kim. During this period, Kylie Cosmetics was appraised at approximately $1.2 billion, but uncertainties surrounding the company’s valuation have arisen since the acquisition. Presently, Jenner and Kardashian are in talks to reclaim their once-cherished stakes, yet an agreement remains elusive.
The crux of the issue lies in their dissatisfaction with Coty’s management of their brands. In a recent disclosure to investors, Coty reported a notable double-digit surge in makeup sales at Kylie Cosmetics, attributed to wider distribution channels and the introduction of the company’s revolutionary product, Kylash mascara.
In tandem, Coty’s stock has exhibited a steady ascent this year, correlating with its global expansion of both brands. Although neither Jenner nor Kardashian has explicitly articulated their grievances with Coty’s strategic direction, their determination to safeguard their personal brands remains resolute.
Adding complexity to the narrative, JAB is under the ownership of the Reimann family, whose ancestors were discovered to have had affiliations with Nazi supporters in a revelation from recent years. Despite this revelation, the Reimann family, among Germany’s wealthiest, donated a commendable $11.4 million to charitable causes.
While Kim Kardashian may face a less arduous path given her retained majority control, Kylie Jenner’s pursuit may prove more challenging. Her endeavor could also require a substantial financial commitment, as Coty has enjoyed recent financial prosperity. However, if it turns out that Kylie Cosmetics was overvalued during the initial transaction, a 51% stake today might command a lower price than it did in 2019.
As the drama unfolds, the world will watch with anticipation. Both Jenner and Kardashian have demonstrated their astute business acumen in the past, and they will undoubtedly employ innovative strategies to regain control of their beloved enterprises.
