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Shares of the CoverGirl cosmetics maker, which
have lost about two-thirds of their value this year, were up 14%
in premarket trading.
The deal values West's cosmetics line at $1 billion, slightly
lower than the $1.2 billion valuation Coty put on West's
half-sister Kylie Jenner's business when it bought a majority
stake in her namesake cosmetics line in January.
Coty, which has been saddled with billions of dollars in debt,
is partnering with brands endorsed by celebrities with a huge
social media following to make its products resonate better with
millennial customers who prefer more niche brands.
West, who is known for chronicling her life with her sisters on
TV's "Keeping Up with the Kardashians", launched her makeup line
in 2017, two years after Jenner's successful foray into the
beauty industry.
Earlier this month, Coty said it expected the strong demand for
social media-native brands to thrive when some industry experts
labeled it a fad. Its longtime Chairman and two-time Chief
Executive Officer Peter Harf even took it upon himself to
develop Jenner's business.
As part of the deal, which is expected would close in the third
quarter of fiscal 2021, Coty would also develop skincare,
haircare, personal care and nail products for KKW.
The Max Factor owner has been looking to turn around its
business, streamlining its portfolio by buying stakes in the
digital-native brands and bringing Harf back to revive sales
amid a global decline.
Coty last month offloaded majority stake in its hair and nail
care business to buyout firm KKR & Co Inc for $3 billion amid
temporary salon closures across the globe.
(Reporting by Maria Ponnezhath and Praveen Paramasivam in
Bengaluru; Editing by Ramakrishnan M. and Arun Koyyur)
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