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A Tale of Two Kardashians and Coty?

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What's going on with Coty?

Coty announced it is "currently engaged in discussions with Kim Kardashian West regarding a possible collaboration with respect to certain beauty products," in a Securities and Exchange Commission filing on June 2.

Kardashian West's younger sister, Kylie Jenner, also has a beauty brand. In 2019, Jenner sold 51% of her cosmetics company to Coty for around $600 million.

Prior to the Kardashian West announcement, 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.

So, what's going on?

Litigator and legal analyst Rebecca Rose Woodland joined TheStreet to talk about Coty and the tale of two Kardashians. 

Video Transcript: 

Katherine Ross:
This is the tale of two Kardashians for Coty with the negative press with Kylie Jenner, positive press from Kim Kardashian West. So joining me today is Rebecca Rose, the litigator, and legal analyst. Rebecca, let's just take this from the top. What does this mean for Coty? What does this mean for Kylie Jenner? And what does this mean for Kim Kardashian West?

Rebecca Rose Woodland:
Well, I'll tell you there's so much happening here with this Kylie Jenner, Kim Kardashian, Coty triangle, we're going to call it a triangle. So Kylie Jenner gets purchased by Coty. They announced it in November, 2019. In May of 2020 Forbes comes out with a statement telling the world that Kylie Jenner misrepresented the amount that her business was worth. Forbes claims that that was based on some securities filings that Coty. Made now your first blush is oh, okay, well then the Kardashians and Kylie Jenner are going to sue Forbes for defamation. Issues about that would mean then that everything they stated in the press and they stated to Coty would have to be true, that everything Forbes said in their statements would be false because Forbes has a right to defend itself from a libel of defamation by saying "what we said is true."

Rebecca Rose Woodland:
So we haven't seen a defamation act by the Kardashians yet. Bigger issue though now Coty is facing substantial securities violations, lawsuits from shareholders, 10A and 20B lawsuits regarding fraud and misrepresentation to shareholders that either increased or decreased the price of the value. And there are allegations that the CEOs that were in place at the time knew that the Jenner Kardashian clan was misrepresenting and they were included in that misrepresentation. They joined in misrepresenting things to the public.

Katherine Ross:
Rebecca, this is definitely an interesting story to keep an eye on, especially as Coty has had some executive shakeups since they first signed that deal. Thank you for breaking it down for us. And of course, stick with the street for the latest.

Rebecca Rose Woodland:
Thank you.

You can follow Katherine Ross on Twitter at @byKatherineRoss.

Read more from Katherine Ross here.

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