Coty Inc. COTY shares surged higher Wednesday after the luxury goods group said its in talks with Kim Kardashian West that could lead to a collaboration on beauty products.
Kardashian-West, the wife of billionaire entertainer Kanye West and the sister of cosmetics icon Kylie Jenner, owns and controls the KKW Beauty line of beauty products, which Forbes recently valued at around $100 million. Last year, Kylie Jenner sold 51% of her cosmetics company to Coty for around $600 million.
"On June 2, 2020, Coty Inc. reported that the Company is currently engaged in discussions with Kim Kardashian West regarding a possible collaboration with respect to certain beauty products," the company said in a filing with the Securities and Exchange Commission. "There can be no assurance that an agreement for such a collaboration will be reached or as to the terms of any such agreement."
"The Company does not intend to comment further on such a potential transaction unless and until it otherwise deems further disclosure is appropriate or required," the statement added.
Coty shares were marked 5% higher at $4.41 each in early Wednesday dealing, a move that would still leave the stock with a year-to-date decline of around 58%.
Earlier this week, Coty unveiled a a shake-up of its senior management team following reports that alleged Kylie Jenner had overstated her personal wealth to boost the value of a brand sold to the cosmetics group.
Coty Chairman Peter Harf was named to replace the outgoing Pierre Laubies as CEO of the struggling cosmetics group, following a company-wide strategic review that was launched earlier this year.
Coty will also create a three-person executive committee it says will "will make sure that Coty takes the right steps towards becoming a more profitable business and delivering on its commitments."
The moves followed last month's investment from private equity group KKR & Co. KKR, which injected $750 in cash, and could add a further $3.25 billion, via the purchase of a majority 60% stake in its professional beauty and retail hair division once it's carved out of the Coty group.
That deal, which values Wella at $4.3 billion on an enterprise basis, was confirmed Monday.