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Kim Kardashian Considers Buying Back Stake in Beauty Brand


Coty stock (ticker: COTY) remained unchanged on Wednesday following reports that Kim Kardashian is in talks to repurchase the minority stake of her beauty company, SKKN by Kim. The Wall Street Journal revealed that discussions are underway, with details of the financial terms yet to be determined. Both Coty and SKKN by Kim have yet to respond to requests for comment.

Coty stock has experienced a year-to-date gain of 52%, despite trading flat on Wednesday. The brand initially acquired a 20% stake in SKKN by Kim (formerly KKW Beauty) three years ago at a valuation of $1 billion.

While Jefferies analyst Ashley Helgans acknowledges that brand sales are significantly lower in 2021 due to the suspension of the KKW brand, she views the potential buyback as a positive move for Coty. Helgans, who rates Coty stock as Buy with a $16 price target, suggests that the repurchase could help accelerate debt reduction efforts, which remain a priority for Coty.

Coty has previously stated its commitment to deleveraging and reducing debt through cash flows generated from operations. Its fiscal-third-quarter earnings call in May confirmed that the company is “fully on track” in its progress towards this goal.

Overall, a buyback of Kim Kardashian’s stake in SKKN by Kim presents an opportunity for Coty to alleviate its financial burdens and improve its long-term profitability and cash flow.

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