Kylie Jenner no longer owns Kylie Cosmetics, the wildly successful direct-to-consumer makeup brand she launched in 2016. As was reported yesterday, the 22-year-old just sold a 51% stake of the company for $600 million to Coty, the conglomerate that owns such drugstore makeup brands as CoverGirl, Rimmel, and OPI. This means her company has landed a $1.2 billion valuation in just three years.
It also means that one of the fastest-growing indie brands in the makeup industry has now joined the ranks of Big Makeup. Jenner says she will stay on as a “strategic partner” at Coty, but she no longer has a controlling stake in the company she created.
Low overhead, big growth
Jenner launched Kylie Cosmetics through her own website but eventually expanded into Ulta stores. According to Refinery29, the company had extremely low overhead: It outsources its manufacturing, packaging, shipping, and fulfillment and has a tiny staff of two dozen employees. In other words, the success of Kylie Cosmetics relied almost entirely on branding and Jenner’s own star power. Her best-known product was a $29 “lip kit,” which consists of a liquid lipstick along with a lip liner.
From the start, the kits frequently sold out. The immediate success of the brand made her the youngest self-made billionaire, at least according to Forbes. (She also generates income from appearing on Keeping Up with the Kardashians, sharing sponsored Instagram posts with her 128 million followers, and brand collaborations.)
In a press release, Jenner suggested that the partnership would mean increased distribution of products through retailers: “I’m excited to partner with Coty to continue to reach even more fans of Kylie Cosmetics and Kylie Skin around the world.”
By any standard, this Coty deal is a massive success for Jenner. And going forward, Coty appears to believe that it can continue leveraging Jenner’s fame and brand to sell even more products. But part of what made Kylie Cosmetics so exciting was that it allowed customers to support a brand that was built and owned by a young female entrepreneur. And to the young women who bought these lipsticks and blushes, Jenner represented someone they aspired to become. Now that the brand is owned by a massive conglomerate, some of that sparkle might be gone.
Still, given Jenner’s talent for starting businesses, there’s a good chance she’ll launch another one soon. We’ll be here watching.