☰
Coty, which owns cosmetics brands such as CoverGirl, had acquired the stake for $200 million in 2021.
Coty, Inc. (COTY) has sold its stake in Kim Kardashian’s beauty business, SKKN. This is the latest in a series of divestitures to improve its cash position, and retail investors are backing the move.
On Friday, Coty announced the closing of the deal to sell its entire 20% stake in SKKN to Kardashian's clothing company SKIMS. Financial details of the deal were not disclosed.
Coty, which owns cosmetics brands such as CoverGirl, had acquired the stake for $200 million in 2021.
The company said the proceeds would be used to reduce debt and invest in innovations across its broader brand portfolio.
Coty will continue doing business with Kardashian's half-sister Kylie Jenner’s brand Kylie Cosmetics, in which it owns a majority stake.
Like other consumer brands, Coty has struggled recently with weak demand trends, partly because consumers are spending cautiously amid persisting inflation.
Last month, the company cut its annual profit forecast and posted a surprise drop in quarterly revenue.
Coty, founded over a century ago in Paris, is one of the world's largest beauty companies. Its offerings include fragrance, color cosmetics, and skin and body care products.
Just before the SKKN deal announcement, Citi hiked its rating on Coty shares to 'buy' from ‘neutral’, and price target by $1 to $80.
The research firm said investors would see a “large value-unlock opportunity” from Coty's anticipated sale of its stake in German beauty company Wella by the end of 2025.
In 2023, Coty sold a 3.6% stake in Wella for $150 million and retained a 22.3% stake, valued at about $900 million, Coty said at the time. The company sold its Lacoste fragrance license to the French company Lacoste S.A. a year prior.
On Stocktwits, the sentiment notched higher in the 'bullish' category.
A user posted that Coty shares seemed cheap, while another said the company could benefit during the summer season.
Shares trade at $5.56, down 20.1% year to date.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<
subscribe to Asianet Newsable WhatsApp channel by clicking here.