Coty Divests Kim Kardashian’s SKKN Stake to SKIMS in Strategic Move

- March 22, 2025

Unpacking Coty’s Stake Sale and Financial Strategy / Reuters

Kim Kardashian’s Brand Consolidation Under SKIMS

Coty Inc., the powerhouse behind CoverGirl and a major player in the global beauty industry, has sold its 20 percent stake in Kim Kardashian’s beauty brand, SKKN, to her thriving clothing and shapewear line, SKIMS. This transaction consolidates Kim Kardashian’s beauty and lifestyle ventures under a single, unified brand identity, marking a pivotal shift for both Coty and the celebrity entrepreneur. Coty, which originally acquired its stake in SKKN (then known as KKW Beauty) in 2021 for $200 million, stated that the proceeds from this sale will be directed toward reducing company debt and fueling innovation across its extensive brand portfolio. This move comes as Coty grapples with sluggish sales, driven by cautious consumer spending amid persistent inflationary pressures, a challenge that has also impacted competitors like Estee Lauder. For Kim Kardashian, integrating SKKN into SKIMS aligns with her long term vision of creating a cohesive brand experience, blending beauty, skincare, and fashion into a seamless offering that resonates with her audience.

The beauty giant’s decision to divest its SKKN stake reflects a broader strategy to address financial hurdles and refocus its efforts. Coty has faced significant headwinds recently, including a surprising drop in quarterly revenue and a subsequent cut to its annual profit forecast, as reported last month. These struggles are partly attributed to weakened demand in Asia’s travel retail sector, a critical market for prestige beauty brands. By offloading its minority stake in SKKN, Coty aims to bolster its financial health, using the undisclosed sale proceeds to pay down debt and invest in new product development across its diverse lineup, which includes iconic names like Rimmel and Max Factor. Interestingly, Coty is not severing all ties with the Kardashian Jenner family. Anna von Bayern, CEO of Kylie Cosmetics and overseer of Kim Kardashian’s beauty business at Coty, affirmed the company’s ongoing commitment to Kylie Cosmetics, where Coty holds a majority stake. She highlighted that Kylie Cosmetics has seen a 1.5 fold increase in growth over the past two years, signaling a selective approach to maintaining profitable celebrity partnerships.

For Kim Kardashian, this acquisition by SKIMS represents a calculated step toward streamlining her business empire. SKIMS, valued at $4 billion following a 2023 funding round and recently bolstered by a high profile Nike partnership, is poised to absorb SKKN’s beauty essentials and relaunch them under its banner. This aligns with reports from 2023, when Kim was rumored to be negotiating with Coty to repurchase a minority stake in SKKN to expand its product categories, such as skincare and makeup. By bringing SKKN under SKIMS, she gains greater control over her beauty brand’s direction, leveraging SKIMS’ established market presence and loyal customer base. Official statements from SKIMS and SKKN’s Instagram confirm that the transition is underway, with plans to relaunch SKKN essentials and updates promised soon. Kim herself emphasized her mission to create products that “resonate deeply” across shapewear, lingerie, makeup, and skincare, a vision that this consolidation supports by uniting her offerings under one recognizable name.

This transaction also sheds light on broader trends within the beauty and celebrity branding landscape. The industry is witnessing a wave of consolidation as economic pressures, including inflation and shifting consumer priorities, force companies to adapt. Coty’s challenges mirror those of its peers, with weakened sales reflecting a cautious market. However, its continued investment in Kylie Cosmetics suggests confidence in the enduring appeal of celebrity driven brands, provided they align with consumer demand. For Kim Kardashian, consolidating SKKN into SKIMS could enhance operational efficiency and brand equity, positioning her to compete more effectively in the crowded beauty and lifestyle sectors. The move also hints at past tensions, as reports from 2023 suggested both Kim and Kylie Jenner had expressed dissatisfaction with Coty’s management of their brands, potentially influencing this strategic realignment.

While the exact financial details of the SKKN stake sale remain undisclosed, the implications for Coty’s stock (NYSE: COTY) and market position are worth watching. Investors will likely scrutinize how effectively Coty deploys the proceeds to reduce debt and drive innovation, especially given its recent financial setbacks. In the beauty market, where competition spans mass market and prestige segments, Coty’s ability to adapt will be critical. Meanwhile, Kim Kardashian’s consolidation under SKIMS could set a precedent for other celebrity entrepreneurs seeking to unify their portfolios. This deal underscores the evolving relationship between traditional beauty conglomerates and modern celebrity brands, balancing corporate strategy with personal vision in a dynamic industry.

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