Coty shakes off Kylie Jenner problem, surges 20 percent after KKR buys stake
That was one quick makeover.
After getting dinged last week for its ties to Kylie Jenner, beauty products seller Coty announced a $1 billion investment and a management shakeup — sending the stock up 20 percent, to $4.36, in early-afternoon trading.
Coty on Monday said buyout firm KKR will be acquiring a 60 percent stake in Coty’s hair and nail brands, including Wella, Clairol and OPI, in a deal that values the business at $4.3 billion.
The news added some much-needed sheen to Coty’s stock, which plummeted 13 percent on Friday after Forbes accused Kylie Jenner of lying to the press about her wealth, including the financial success of her Kylie Cosmetics business. Coty bought a 51 percent stake in Kylie Cosmetics for $600 million in November with plans to use her social media following to better sell to young people.
Jenner has denied the allegations, including that she presented forged financial information when meeting with the magazine known for its wealth rankings to make herself look richer. The parent company of CoverGirl and Kylie Cosmetics also named Coty’s chairman, Peter Harf, as CEO — its fourth chief executive barely four years amid declining sales. Harf had previously been CEO from 1990 to 2001.
Harf’s appointment was unexpected because the company in February said former Jimmy Choo executive Pierre Denis would assume the reins at the end of May, succeeding Pierre Laubies.
The reason for the change is unclear but the company said Denis, who also resigned from the board, will remain as an adviser to the company as it embarks on a mission to shave its expenses by 25 percent.
Source: Read Full Article