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Dubai-based cosmetic brand Huda Beauty is considering selling a part, or all of its perfume line Kayali, according to people familiar with the matter. Funds from the Kayali sale will allow the founders to buy out TSG Consumer Partners’ stake in Huda Beauty, the people said. TSG Consumer Partners is a private equity fund that acquired the brand’s minority holding in 2017.
According to the source, who asked not to be identified as the information is private, the fragrance and cosmetics brand has lined up Goldman Sachs Group Inc. as an adviser on the potential sale of Kayali fragrance, which will allow the brands to chart an independent course.
Gulf News reports that representatives for Huda Beauty didn’t respond to messages seeking comment, while a spokesperson for Goldman also declined to comment.
Huda Beauty and Its Perfume Line Kayali
Huda Beauty: A Trailblazer in the Beauty Industry
Launched in 2013 by blogger Huda Kattan and her sisters Mona and Alya, the eponymous brand has been valued at more than $1 billion in the past. The brand sells over a hundred products online, from fake eyelashes to lip gloss and skincare products.
Kayali Perfume
Founded by Mona Kattan, Kayali is the sister brand of Huda Beauty, which offers a collection of intoxicating fragrances inspired by her Middle Eastern heritage. Kayali means “My Imagination” in Arabic, and its faceted glass bottles are modern-day odes to the ornate, jewel-like flacons of old, meant to evoke those found in Middle Eastern souks.
The idea of fragrance pairing and layering forms the basis of the Kayali concept. Initially slow to catch on with consumers, it has now become a ‘ritualised’ routine in the perfume trend. Kayali offers about two dozen fragrances, which cost about $140 for a 100-milliliter bottle. These are now sold by major retailers, including Sephora USA Inc., Walgreens Boots Alliance Inc. and ASOS Plc.
The Potential Implications of the Kayali Sale
If Huda Beauty sells its perfume division, Kayali, several potential outcomes could occur:
1. Financial Boost
According to Capstone Partners, merger and acquisition activity in the beauty sector has surged in recent months as buyers try to capitalise on a rise in spending on cosmetics around the world. The advisory found that the value of such deals has jumped 37.5% this year compared with the same period a year ago.
As such, this could be the appropriate time for Huda Beauty to sell its perfume line and try to boost its financial state to fund the buyout of TSG Consumer Partners’ minority stake.
2. Focus on Core Business:
Speaking to Harper’s Bazaar Arabia in July, Huda Kattan mentioned that with a renewed sense of purpose, they plan to eliminate half of its products. “I think the brands that are overwhelming consumers with too much product are going to lose their consumers, and there’s so much damage that happens to the environment.” Kayali’s sale is probably a part of Huda Beauty’s rebranding. If the sale is successful, the founders will have more control over their brand, such as by altering its product portfolio. The brand could focus on its core makeup and skincare lines, potentially driving growth and innovation in those sectors.
