by
Bloomberg
Published
September 11, 2024
Dubai-based cosmetics company Huda Beauty is considering selling all or part of its fast-growing fragrance division, according to people familiar with the matter.
The company — which has more Instagram followers than Kylie Jenner and Selena Gomez combined — has tapped Goldman Sachs Group Inc. as an adviser on the potential sale of Kayali, the people said. The deal would pave the way for fragrance and cosmetics brands to chart an independent path, they said, asking not to be identified because the information is private.
The money from any sale would also allow the founders to buy TSG Consumer Partners’ stake in Huda Beauty, the people said. The private equity fund acquired a minority stake in 2017.
The discussions are in their early stages and plans for the fragrance unit could change, the people said. Representatives for Huda Beauty didn’t respond to messages seeking comment, while a Goldman spokesman declined to comment.
Blogger Huda Kattan and her sisters Mona and Alia launched the eponymous brand in 2013, which has been valued at over $1 billion in the past. The company sells over a hundred products online, ranging from false eyelashes to lip gloss and skincare products.
She has amassed over 54.2 million followers on Instagram, making her one of the most popular beauty brands on social media. Competitors Kylie Cosmetics and Rare Beauty have 24.9 million and 7.6 million followers respectively.
Earlier this month, the Bloomberg Billionaires Index estimated Gomez’s net worth at $1.3 billion — the bulk of which is tied to her cosmetics line Rare Beauty, which has become a hit among influencers and beauty-obsessed teens. Meanwhile, Kylie Jenner sold a 51% stake in her cosmetics line to Coty Inc. for $600 million in 2020.
Kayali, founded and run by Mona Kattan, offers about two dozen fragrances and launched six years ago. Its scents — which cost about $140 for a 100-milliliter bottle — are now sold by major retailers including Sephora USA Inc., Walgreens Boots Alliance Inc. and ASOS Plc.
Recent months have seen a surge in merger and acquisition activity in the beauty sector, as buyers try to capitalize on rising spending on cosmetics worldwide, according to Capstone Partners. The value of such deals has jumped 37.5% so far this year compared to the same period last year, the consultancy found.
The potential sale of Kayali comes a year after private equity fund Advent International acquired a stake in the group behind Parfums de Marly and INITIO Parfums Privés, which has a strong presence in the Middle East.