What happened

Shares of Coty (NYSE:COTY) were moving higher today after the cosmetics giant forged yet another deal with the Kardashian family, this time taking a 20% interest in Kim Kardashian West's beauty business for $200 million, valuing the enterprise at $1 billion.

The deal comes just months after Coty took a 51% stake in Kylie Cosmetics, the company founded by Kardashian West's half sister Kylie Jenner.

Coty stock was up 10.5% as of 10:52 a.m. EDT.

A cosmetics table at a store

Image source: Getty Images.

So what

Coty said it was forming a strategic relationship with Kardashian West, one of the most popular celebrities on social media with more than 300 million followers across multiple channels. Together, Coty and Kardashian West plan to expand her beauty brand into new categories and new markets around the world.

Coty CEO Peter Harf said, "Kim is a true modern day global icon. She is a visionary, an entrepreneur, a mother, a philanthropist, and through social media has an unparalleled ability to connect with people around the world. This influence, combined with Coty's leadership and deep expertise in prestige beauty, will allow us to achieve the full potential of her brands."

Investors cheered the news as it's the latest step in the company's turnaround effort following the deal with Kylie Jenner last November and a strategic partnership with private-equity firm KKR in May. That latter move has helped give Coty some much-needed liquidity as it struggles through the coronavirus pandemic , which has zapped cosmetics spending around the world.

Now what

Coty shares are down 60% year to date as revenue fell 23% in the fiscal third quarter (January-March) due to the impact of the pandemic. And given the shutdowns in the U.S. and Europe through April and May, the fourth quarter is likely to be even worse.

Still, the company seems to have assuaged some of its liquidity concerns with the KKR deal, and with the stock down so much, there's significant upside potential if it can execute on its turnaround. The new deal with Kardashian West adds to hopes that the company can eventually get back on the right track.

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