On the verge of an agreement to acquire one of the hottest new makeup names, the directors of besieged beauty giant Coty Inc. had some unconventional concerns.
Will sales fall if the chief executive decides to have another child? Can a 22-year-old social media star stay out of trouble with security? What role will your mother play?
Last year, Coty was plotting a plan to pay $ 600 million for the equity control of the cosmetics startup founded by Kylie Jenner, star of “Keeping up with the Kardashians,” a move that aims to revive a beauty business dependent on basic drugstore products like Cover Girl and Max Fator.
Coty’s directors ended up deciding that Kylie Cosmetics’ indicators – $ 200 million in annual revenue with fewer than a dozen employees and virtually no advertising spend – outweighed their concerns. Also convincing were the assurances of Ms. Jenner’s mother, Kris Jenner, who helped launch the company in 2015 and led the negotiations.
A year after closing the deal, Kylie Cosmetics reinforced its new parent company and gave it a few hits – although none that the company had initially foreseen.