Celebrity beauty brand stocks can be exceptionally exciting prospects when first looking at them. After all, they have the endorsement of celebrities to build advertising off of, which tends to get people in the door early on. However, these trends fade as first consumers recognize the overpriced nature of products that perform relatively the same as non-branded ones.
This then leads these celebrity beauty brand stocks to dip in value, causing severe losses for investors who bought into the initial hype. Moreover, these brands tend to lack the longevity necessary to offer long-term returns. Rather, these companies are often purchased by larger conglomerates after their value fades and treated as another portfolio asset.
This is due to the fact that most celebrity beauty products are only worth the name of their endorsement. Their chemistry and products often tend to be similar to legacy or drugstore brands, just with flashier marketing. Thus, it is imperative for investors to carefully avoid the following stocks as their value shrinks due to dipping revenues from consumer wariness.
COTY (COTY) Having lost nearly 20% of its value over the last six months COTY (NYSE: COTY ) is feeling the effects of consumer awareness regarding celebrity brands. The company had previously acquired Kylie Jenner’s beauty brand , Kylie Cosmetics, in an attempt to bolster its portfolio with her strong follower base. This, however, has not had much impact on the company’s net income bleed.
For e.
