In a pre-IPO round, Kim Kardashian’s Skims are aiming for a $4 billion valuation

by | Jul 18, 2023 | BUSINESS | 0 comments

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Kim Kardashian is getting closer to Wall Street by the minute.

Multiple sources told OZIFOX that the mega influencer’s Skims brand is currently engaged in a round of fundraising that is expected to value the rapidly expanding innerwear industry at close to $4 billion.

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Although the round has not yet concluded, it is said that Boston-based mutual funds and family offices are investing in what would be a pre-IPO fundraise, reinforcing the company’s value in anticipation of a prospective offering within the next six to twelve months.

In January 2022, Skims raised $240 million in a Series B financing round, valuing the business at $3.2 billion.

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Requests for comment from Kardashian’s representatives were not immediately fulfilled.

The firm is expanding even faster than the company’s valuation, which is expected to increase quickly from round to round and might even move much higher again in a future IPO on Wall Street.

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Without a stable retail basis, the brand is reportedly on track to generate sales of close to $1 billion this year with a growth rate of about 100%.

In contrast, Victoria’s Secret & Co. suffered a 6% decline in sales to $6.3 billion last year and currently has a $1.6 billion market cap.

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With a combination of internet notoriety and true financial acumen, Kardashian has grown her four-year-old company, upending the norms in innerwear and fashion.

Even while Kardashian is in the spotlight often—most recently posing with polished models for a Steven Klein-shot Skims bikini campaign—she is supported by a strong staff that includes cofounder Jens Grede and his wife, founding partner Emma Grede. Along with Frame, the couple also founded Khloé Kardashian’s Good American denim company.

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Chief Executive Officer of Skims Jens stated to OZIFOX in 2021: “Our objective is to create a handful of generation-defining brands. I want today to be identified by Good American, Skims, and Frame, just like the 1990s were defined by Guess, Victoria’s Secret, and Calvin Klein.

That’s a lofty goal, and Skims might undoubtedly contribute to realizing it if its growth pace is maintained.

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 Carmen Electra and Jenny McCarthy for Skims. COURTESY

The firm is expanding even faster than the company’s valuation, which is expected to increase quickly from round to round and might even move much higher again in a future IPO on Wall Street.

Without a stable retail basis, the brand is reportedly on track to generate sales of close to $1 billion this year with a growth rate of about 100%.

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In contrast, Victoria’s Secret & Co. suffered a 6% decline in sales to $6.3 billion last year and currently has a $1.6 billion market cap.

With a combination of internet notoriety and true financial acumen, Kardashian has grown her four-year-old company, upending the norms in innerwear and fashion.

Advertisements

Even while Kardashian is in the spotlight often—most recently posing with polished models for a Steven Klein-shot Skims bikini campaign—she is supported by a strong staff that includes cofounder Jens Grede and his wife, founding partner Emma Grede. Along with Frame, the couple also founded Khloé Kardashian’s Good American denim company.

Chief Executive Officer of Skims Jens stated to OZIFOX in 2021: “Our objective is to create a handful of generation-defining brands. I want today to be identified by Good American, Skims, and Frame, just like the 1990s were defined by Guess, Victoria’s Secret, and Calvin Klein.

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That’s a lofty goal, and Skims might undoubtedly contribute to realizing it if its growth pace is maintained.

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Kim Kardashian modeling in Skims’ latest swim campaign, shot by Steven Klein.

Kardashian is obviously keeping busy in the interim because she is reportedly prepared to leave her Coty Inc.

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The cosmetics giant paid $200 million for a 20% stake in Kim Kardashian’s company, KKW Cosmetics, in 2021, suggesting that the brand was worth $1 billion at the time.

However, rumors are emerging that the billionaire is in negotiations to take back full control of her cosmetics company.

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Requests for comment regarding the stories about the beauty industry, which were initially reported by The Wall Street Journal, were not immediately answered by Coty or a representative for Kardashian.

However, Jefferies analyst Ashley Helgans hypothesized that it would be a desirable choice for Coty, which is considering a dual listing in New York and Paris.

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“Debt paydown is a priority for Coty, and the repurchase could help accelerate deleveraging efforts,” she added. “Though the value of the brand is probably lower today.”

Skkn by Kim Kardashian. PHOTO COURTESY OF SKKN BY KIM

Since Coty entered the industry, it has grown into luxury skincare with an expensive Skkn launch. Sue Nabi, CEO of Coty, recently stated that the company is outperforming forecasts and that one of the best-selling items is actually the entire collection, which has a $673 suggested retail price.

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It has temporarily put a halt to beauty and fragrance debuts, but there have been recent rumors of future product introductions.

There were “assumptions that the brand would eventually return to makeup and fragrance,” according to Helgans. As a result of the suspension of the KKW brand, “we estimate brand sales today are a small portion of what they were in 2021, and the price for the 20 percent stake would be less than the $200 million paid to Kim back then.”

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The agreement with Kardashian is comparable to the one that Coty reached with Kylie Jenner, her sister. For $600 million in 2019, Coty acquired a 51 percent stake in Jenner’s company, Kylie Cosmetics.

Coty most recently increased their forecast for the fourth quarter and the entire fiscal year 2023. For the three months ending June 30, the firm now anticipates like-for-like sales growth of 12 to 15 percent and a 10 to 11 percent increase for the entire fiscal year.

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The discussions with Coty are independent of the ongoing campaign to raise money for Skims.

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