Coty Inc. said Monday that private-equity firm KKR & Co. is buying a majority stake in its professional beauty and retail hair businesses as the cosmetics company experiences a sales decline during the novel coronavirus pandemic.
Makeup sales decline amid coronavirus.
KKR & Co. is investing $750 million in the company and will buy its hair care brands Wella, Clairo and ghd brands, along with nail polish maker OPI. Coty said it would earn around $3 billion in cash from the divestment. The brands will be converted to stand-alone companies and KKR will have a 60 percent stake.
The news comes as consumers opt for low-maintenance skincare and beauty routines with stay-at-home orders still in place in many parts of the country amid the COVID-19 pandemic. And with unemployment spiking as a result of the virus, Americans are only buying essential goods, and makeup isn't a high priority for most.
KYLIE JENNER UNLOADS $600 MILLION STAKE IN BEAUTY COMPANY
Total beauty sales declined by 58 percent in the week ending March 28 — shortly after stay-at-home mandates were put in place in most parts of the country — versus the prior year, according to NPD data. However, products such as nail care, hair color, body oils and home scents experienced sales growth, with some in double-digits, according to the report, suggesting that more consumers are buying beauty products online as stores are closed.
The trend toward natural skincare and beauty products was apparent even before the coronavirus pandemic and industry experts predict that it will continue to grow.
CLICK HERE TO READ MORE ON FOX BUSINESS
“Clean beauty, which is already an important trend to watch, will be amplified as consumers re-interpret what safety means to them,” Larissa Jensen, a beauty industry analyst for NPD Group, wrote.