Kim Kardashian West sold a 20 percent stake of her company, KKW Beauty, to cosmetics company Coty for $200 million. The deal brings the star’s net worth to about $900 million as the beauty brand was valued at $1 billion, according to a Forbes report released on Monday.
When the deal closes, Kim will continue to be a majority stakeholder in the company. The reality star will retain a 72 percent stake in the beauty brand while her mother, Kris Jenner, will hold 8 percent according to Forbes estimates. Neither Kim nor Kris has confirmed those numbers.
The deal is set to close at the end of next year. Kim will continue to work with the company on artistic efforts while Coty will work on research and product development.
“This relationship will allow me to focus on the creative elements that I’m so passionate about while benefiting from the incredible resources of Coty, and launching my products around the world,” Kim told TMZ on Monday.
KKW Beauty is best known for its contouring creams and highlighters but also offers fragrances and other beauty products. The brand may expand as Coty will act as a proprietor for “skin, hair, personal, and nail products,” according to a TMZ source.
This deal comes at a time when the cosmetics giant, Coty, has been accused of not keeping up with the times. This purchase is an attempt to freshen up the 116-year-old company’s image. KKW Beauty is a trendy and successful brand. After working with her half-sister, Kylie Jenner, on a lip kit, Kim started the company in 2017. The products were first offered only through online sales. However, the reality star grew the brand, and in October of 2019, the products became available in Ulta stores. The beauty company generated $100 million in revenue in 2019.
The $200 million acquisition also comes as, according to Forbes, Wall Street has accused Coty of paying too much for purchases. This amount is in line with the price that Coty paid for their stake in Kylie’s company. In that deal, which was announced earlier this year, Coty paid $500 million for a 51 percent stake in Kylie Cosmetics.
This deal does have some resistance. A partner of KKW Beauty, Seed Beauty, recently filed a lawsuit to prevent the transfer of any of their trade secrets to Coty. Seed Beauty works with KKW Beauty to manufacture and ship their products. A temporary order has been granted to keep the information private but that ends on August 21.