Coty Inc.( COTY ) - Get Reportsurged Monday after the luxury goods group agreed to buy a $200 million stake in Kim Kardashian West's beauty business.
Coty and Kardashian-West, the wife of billionaire entertainer Kanye West and the sister of cosmetics icon Kylie Jenner, also agreed to a strategic partnership that would expand the KKW Beauty line of beauty products. Coty's $200 million represents a 20% stake in KKW, which Forbes recently valued at around $100 million. Last year, Kylie Jenner sold 51% of her cosmetics company to Coty for around $600 million.
“Kim is a true modern day global icon. She is a visionary, an entrepreneur, a mother, a philanthropist, and through social media has an unparalleled ability to connect with people around the world," said CEO Peter Harf. "This influence, combined with Coty’s leadership and deep expertise in prestige beauty will allow us to achieve the full potential of her brands.”
Coty shares were marked 12.44% higher at $4.70 each in pre-market trading Monday dealing, a move that would still leave the stock with a year-to-date decline of around 56.3%.
Earlier this month, Coty unveiled a a shake-up of its senior management team following reports that alleged Kylie Jenner had overstated her personal wealth to boost the value of a brand sold to the cosmetics group.
Coty Chairman Peter Harf was named to replace the outgoing Pierre Laubies as CEO of the struggling cosmetics group, following a company-wide strategic review that was launched earlier this year.
he moves followed last month's investment from private equity group KKR & Co. KKR, which injected $750 in cash, and could add a further $3.25 billion, via the purchase of a majority 60% stake in its professional beauty and retail hair division once it's carved out of the Coty group.
Last Friday, shares in Gap Inc.( GPS ) - Get Reportsurged nearly 19% after Kanye West agreed to sell his 'Yeezy' clothing line, which was recently valued at $2.9 billion, in the struggling retailer's stores starting next year. West will receive loyalty payments and "potential equity' related to sales targets of the brand over its ten-year timeframe, Gap said.