Beauty label Kiko confirms possible sale of minority stake to new investor to bolster e-tail and international expansion
Speaking on 3rd May at the second edition of the Beauty Summit organised by management consultants Pambianco in Milan, Cristina Scocchia, CEO of Italian cosmetics retailer Kiko, confirmed that the company is assessing the opportunity of selling a minority stake to a financial partner. The news was initially reported by Reuters at the end of March.
“We have a very ambitious investment plan, worth €90 million in three years. We could therefore consider the possibility of bringing in a minority shareholder, one able to contribute specific industry know-how as well as fresh finance,” said Scocchia, interviewed by journalist Nicola Porro, a moderator at one of the Summit’s panel discussions. “We are in advanced talks with an investment fund,” she added.
In 2017, Kiko reported a revenue of €610 million. The group has 8,000 employees and is present in 21 countries, and it is strongly focusing on digital tools: “Not just social media and digital marketing, you need cutting-edge technology in operations too, beginning with the company’s IT system. We are planning to invest approximately €25 million in IT in the next three years.”
Kiko has decided to close down its US subsidiary, after experiencing several difficulties on the American market in the last five years. “The US cosmetics market is very tough, owing to the presence of strong competitors. Besides, brick-and-mortar retail in the USA is in deep crisis. In 2017, 7,300 stores in all product categories closed down,” said Scocchia. “We decided to focus on other priorities. Only three of the 30 stores previously active in the USA are still open, more for their marketing and image contribution than for their sales. They are a bolster for our e-tail business which, ever since we began to collaborate with Amazon, is doing very well,” she added.
One of Kiko’s medium-term priorities is indeed boosting online sales. They currently account for 3.5% of total revenue, and the target is to grow to 6-7%, also by launching e-tail operations in China. Another focus will be expansion in regions which are relatively new to Kiko, such as the Middle East, India and Turkey, where the brand intends to open 70 stores in the next three years, by means of local partnerships.
Copyright © 2023 FashionNetwork.com All rights reserved.