On Monday, Kylie Jenner sold 51% of her cosmetics and skin care brand, Kylie Cosmetics, to Coty for $600 million, a price tag that values her enterprise at $1.2 billion.
Whether we agree that she is self-made or not — and you can argue that in many ways she is mom-made — you can’t dispute where she is now, or the effect the success her business, and that of her extended family, has had on the way we shop, and even think about shopping.
Which suggests that this move may have repercussions for us all. Someday we may study them in school, but for now, it’s even more interesting to engage in the Kardashian-Jenner equivalent of fantasy football. Let’s play.
Vanessa Friedman: This is actually a big deal for two reasons: It not only makes Kylie, by some estimates, the first Kardashian-Jenner billionaire, it also makes her, I believe, the first Kardashian-Jenner to officially become part of the old-school fashion-beauty establishment. Milestones!
And yet part of what I have loved about watching this family build its empire(s) is the outside-the-system nature of the whole thing.
At the beginning, the system kind of turned up its collective nose at them. They, of course, have been laughing their way to the bank ever since, But I wonder if this Coty-Kylie deal is going to undermine that appeal. Is it the final K-J triumph, or the beginning of the end? What do you think?
Jessica Testa: Oh, it’s just the beginning — not of the end — of the next stage. The Kardashian-Jenner family — or more accurately, Kris — has worked hard to position Kylie as the Entrepreneur of the bunch (maybe to Kim’s chagrin). I think selling to Coty only strengthens that image.
In July, we learned that Kylie Cosmetics sales were declining, and that the brand wasn’t attracting loyal customers. Now is the perfect time for Kylie to hand off the business to a well-respected international conglomerate and do something else with her time. (Rise and Shine, the baby brand?) That’s the K-J M.O.: Start a business, then start another one.
But does this sale make Kylie part of the system now? That’s a trickier question. The Kardashian-Jenners have created their own establishment, and it’s become so large and unwieldy that I’m not sure it’ll ever fully fit into the confines of the traditional establishment. At this point, do they really need it to?
VF: I would say absolutely not. In fact, they derive part of their power from having created a system of their own. But maybe at a certain point what they need is the infrastructure. Kylie famously makes so much profit from her lip kits, and so on, because of her tiny staff and low overhead.
But after a while you probably need more people to handle volume, and Coty can give her that. Do you really think the sale means she’s getting out while the getting’s good?
Both sides have paid lip service (no pun intended) to the idea that Kylie will remain as involved as ever. And I can’t imagine her followers continuing to buy — literally — into the whole idea if she doesn’t keep up the posting volumes.
Which brings up the question of what effect going larger will have on them, the superfans, the ones who lined up for hours before the Kylie Cosmetics pop-up drops. Is it going to grow their numbers, or actually turn some of them off? After all, part of Kylie’s appeal is that she is cooler than Max Factor and CoverGirl.
JT: I totally expect Kylie to remain the public face of the company — to keep announcing product drops in dribbling Technicolor on Instagram. But it makes sense for Coty to take the business reins, managing logistics and expansion.
And that’s great news for Kylie, a celebrity! She can cash out and focus on expanding her personal Kylie brand beyond beauty and skin care.
This should excite Kylie superfans, especially if they’re indeed more loyal to the woman than to her lip kits. (One market research firm found that from roughly 2016 to 2019, more than half of all her customers made just one purchase.)
The question for me is whether Coty will double down on Kylie’s coolness, or apply its more time-tested sales models to bring in a new type of customer — shoppers who don’t really care about her. (Imagine!) Will we start seeing lip kits in the CVS beauty aisle?
And what about the rest of the Kardashian-Jenner businesses? Do you think this sale speaks to the future of Khloe’s Good American jeans, or KKW Beauty or Fragrance, or Skims (the shapewear line formerly/controversially known as Kimono)? Or, uh, Arthur George?
VF: In other words, is this a new model for their empire? Will Warnaco buy Skims? Or what about PVH, which owns Calvin Klein underwear, a brand that once famously featured the whole Kardashian-Jenner clan in an ad campaign? I can easily imagine that scenario, just as I imagine Estée Lauder is watching what happens with one eye on Coty and one eye on KKW.
For a while, the big trend in beauty was celebrity fragrances, and there was an arms race among the big groups to sign as many famous names as they could. Maybe these direct-to-followers beauty brands will be next — not just Kim’s, but also Lady Gaga’s Haus Laboratories.
In this possible future, Kylie becomes the sharp end of the spear in which the Kardashian-Jenner brands and their ilk begin to infiltrate any number of big groups, liberating the family to move on to new ventures, like Kim’s dream law firm. Just think of the twist if, in a few years (and after passing the bar), KKW sells her beauty brand to Lauder or L’Oréal for another half billion, and then uses the windfall to set up a pro bono venture dedicated to wrongful convictions. What an idea that would be.
But it also makes me wonder if this is an acknowledgment that the influencer model only takes you so far, and then you really do need the backing of a classic bricks-and-mortar operation, just as so many digital brands like Warby Parker and Moda Operandi have opened physical locations.
If the future of influencing (terrible word) is really in the micro-selling game as opposed to the big-brand game, so that the actual big brand is always the personal brand, as opposed to any specific product. In which case, entrepreneurs like Kylie just keep creating and offloading, creating and offloading, since what they are really selling is themselves.
Or is that reading too much into what is just a standard acquisition?
JT: Let’s look at the great Jaclyn Cosmetics disaster of 2019. In May, makeup artist and YouTube personality Jaclyn Hill introduced a line of 20 nude lipsticks. By June, she was offering refunds after customers complained that the product was subpar (uneven textures) and unsanitary (allegations of mold).
Introducing a beauty brand is hard! Especially as a solo influencer. Backing from a bricks-and-mortar operation could undeniably make it easier, even if it removes some autonomy and makes you seem a little less cool. But first that operation has to come calling.
That’s why it’s impossible to apply lessons from the Coty-Kylie sale to the rest of the influencer world. Most influencers are not Kardashian-Jenners. The clan exists on a different plane; they may sometimes look and act and sell weight-loss tea like influencers, but their fame and wealth has propelled them into a stratosphere where giant brands orbit them and social media controversies blow over in a relatively short time.
Jaclyn Hill, who recently announced a comeback, does not exist on that plane. She’s down here with the rest of us, still dealing with her backlash. What I know is this: Kylie has more cash to expand her empire today than she did yesterday.
And the Kim Kardashian fantasy pro bono firm will do wonders for Kanye West’s 2024 presidential campaign.