Kylie Jenner was named the world’s youngest self-made billionaire only seven months ago, so we all had a bit of whiplash this week when it emerged she has already sold the majority share of her cosmetics brand for an eye-watering $600 million (£460 million).
The unprecedented success of Kylie Cosmetics has elevated Kylie from being just a reality TV star with famous sisters, to a savvy businesswoman in her own right.
Who ever thought that when Kylie, 22, admitted to using lip fillers all those years ago, that she would be able to turn it into a billion-dollar brand?
It surely takes a smart woman (and perhaps a small village) to be able to do so, but was it a smart move to give away her majority share in the booming company so soon?
Alex Smith, founder of Basic Arts, which has consulted for brands like Innocent and Hello Fresh, told Metro.co.uk: ‘It looks to me like this was a good move for all concerned.
‘By definition, celebrity brands burn fast and bright – it’s not like David Beckham fragrances and the like ever went on to challenge Chanel – and so there’s a decent chance she’s cashing in when the brand is at the peak of what she can drive by star power alone.’
In her statement, Kylie clarified that she would maintain creative control of Kylie Cosmetics despite handing over most of the financial reigns.
‘This partnership will allow me and my team to stay focused on the creation and development of each product while building the brand into an international beauty powerhouse,’ Kylie said.
The international part of her statement is key because so far, Kylie Cosmetics has been mostly available in the US and not as easily available in the UK and other markets.
Which is where a big umbrella brand like Coty can step in to help.
Roz Sheldon, head of client services at Igniyte, a reputation management company, said: ‘Coty is well placed to add value by using their global reach and expertise in R&D, manufacturing, distribution, commercial and go-to-market expertise to support global expansion.
Isa Lavahun, Digital Brand Manager at Cosmetify agreed: ‘Now worth a whopping $1.2 billion (£920 million), it feels like Kylie has done all she can to grow the business alone.
‘Her current international reach is limited and global expansion seems like the smartest next move to make – enter Coty. As fans outside the US don’t have easy access to Kylie Cosmetics, Coty can bring in their resources, suppliers and contacts to build the business globally, turning it into the next L’Oréal or Estee Lauder.
‘This is a bold but exciting move for Kylie, most likely to be a good one.’
Although she’s making serious bank now, Kylie has previously stated that she actually has no real interest in the money side of things.
In an interview with Harper’s Bazaar, the beauty mogul explained: ‘I don’t really do it to make money or think that far into the future if this is going to be super-successful. I just knew my talents and was passionate about make-up and lips and lipstick.’
She continued: ‘It’s been a real love of mine for as long as I can remember. I never even knew that you can really turn your passion into a business, you know. I just followed my heart and went with how I felt.
‘Now I just feel so blessed every day to wake up, have fun doing what I love and make a career out of it. It’s amazing!’
Yes but having a few extra zeros on your bank statement no doubt make those mornings a little sweeter.
The lucrative new deal shows that Kylie and her team are very aware of what’s going on with the international market right now.
A report from Gartner’s Digital IQ Index for the UK Beauty Market in the UK has revealed that the lipstick market is burgeoning in the UK with consumers spending more on lipsticks since 2015.
There’s no denying that Kylie Cosmetics’ success relies heavily on the star’s fame and reach – she’s one of the most followed celebrities on Instagram with over 151 million followers.
But where the experts differ is how Kylie should continue to use her star power to boost the brand.
Alex believes Kylie should ‘decouple’ from Kylie Cosmetics, explaining: ‘In order for it to transition into being a genuine beauty powerhouse like Lancome and MAC, it needs to decouple itself from her, so it isn’t so utterly reliant on her celebrity stock.
‘After all, there are more non-Kylie fans than Kylie fans in this world. In 10 years time, if all has gone well for Kylie Cosmetics, most of its customers won’t even realise who started it – it will be standing on its own two feet.’
He added: ‘Essentially she provided the rocket fuel for this business to get off the ground, and now it’s time to pass the responsibility on and “de-celebrify” it before it comes crashing back to earth.’
But Roz argues: ‘The brand has been built by Jenner’s influence across social media and TV.
‘With around 150 million followers on Instagram and 30 million Twitter followers she will need to ensure that she maintains this influence and remain a positive role model in order to continue to appeal to her followers.’
Fans will be watching closely to see what Kylie has in store over the next year – her recent venture Kylie Skin is also taking off.
Ultimately, she’s certainly created herself a financially stable future and selling her share could turn out to be the smartest move she’s made yet.
Alex said: ‘This of course will be doubly good for her, because not only does she get cash now, but her remaining stock could well end up being worth even more in the long run thanks to her stepping away.’
Has Kylie got time to come and teach us business 101?
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