Kylie Jenner is no billionaire — and that’s bad news for Coty, the beauty company that bought a controlling stake in her makeup business last year.
Shares of Coty tanked 13 percent on Friday after Forbes revoked Jenner’s status as the world’s youngest self-made billionaire and questioned whether the pouty-lipped Kardashian-clan member has been forging financial information to make herself look richer, including tax filings for her fledgling makeup empire, Kylie Cosmetics.
“Kylie’s business is significantly smaller, and less profitable, than the family has spent years leading the cosmetics industry and media outlets, including Forbes, to believe,” Forbes claimed in the explosive report.
The news dragged Coty down because it forked over $600 million for a 51 percent stake in Kylie Cosmetics last November. And while Wall Streeters say they aren’t concerned that Coty was duped into making the deal, they fear its investment could be in danger if Jenner’s ability to sell to young people wanes.
“The risk is that Forbes’ contention taints her reputation,” DA Davidson analyst Linda Bolton Weiser told The Post. “She is the brand.”
Wall Street analysts at the time of the $600 million deal blasted the parent of CoverGirl and Max Factor brands for overpaying for a makeup company run by a 22-year-old. But Coty executives defended the move by pointing to Jenner’s massive social media influence with “Generation Z consumers.”
“On social media, Kylie has over 270 million followers,” Coty Chief Financial Officer Pierre-André Terisse said in a conference call at the time. “To put this in perspective, with a single post, she’s able to reach more than double the number of people who watch the Super Bowl every year.”
Forbes on Friday suggested that Jenner’s November sale to Coty alerted them that something was amiss. As a publicly traded company, Coty is required to report accurate financial statements with regulators — and the numbers it provided on Kylie Cosmetics were less sexy than had been previously reported, including by Forbes.
“Coty said that sales were up 40 percent from 2018, meaning the business only generated about $125 million that year, nowhere near the $360 million the Jenners had led Forbes to believe,” Forbes said. Forbes said Jenner’s reps had told them Kylie’s skin-care line did $100 million in revenues in its first month after its May 2019 launch, but Coty said the skin-care line’s sales were closer to $25 million months later, in November.
Jenner denies she lied about her finances, and her attorney, Michael Kump, is demanding a retraction.
“We have reviewed Forbes’ article accusing Kylie of engaging in deceit and a ‘web of lies’ to inflate her net worth. The article is filled with outright lies,” Kump said in a statement to The Post on Friday.
As of Friday, Jenner’s social media following still looked strong with 178 million Instagram followers, 33.7 million Twitter followers and 26.9 million Facebook followers.
But investors pushed Coty’s stock to close down 13 percent, to $3.63 a share — it’s lowest point in an already brutal year that’s seen the stock drop 67 percent.
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