Kim K. is getting closer and closer to the stock market every day.
According to various individuals who spoke to WWD, the mega influencer’s Skims brand is currently in the midst of a round of fundraising that will value the rapidly expanding innerwear business at close to $4 billion.
Boston-based mutual funds and family offices are reportedly participating in a pre-IPO fundraiser that could re-establish the company’s worth and pave the way for an initial public offering in the next 6 to 12 months.
In January 2022, Skims raised $240 million in a Series B funding round, at a valuation of $3.2 billion.
Requests for a response from Kardashian’s camp went unanswered at the time of publication.
The company’s valuation is growing even faster than the company itself and is expected to continue to rise rapidly from round to round. This could lead to an even higher valuation in a future offering on Wall Street.
Without a stable retail foundation, the brand is reportedly on track to generate sales of close to $1 billion this year.
On the other hand, Victoria’s Secret & Co. had its revenue drop by 6 percent to $6.3 billion last year and is now worth only $1.6 billion.
With a combination of online fame and true economic savvy, Kardashian has established the four-year-old business, which has undoubtedly disrupted the innerwear and fashion industries.
The Grede Effect: How a Fashion Power Couple Is Changing the Industry
Khloé Kardashian may be the face of her fashion brands, but she’s backed by a formidable team that includes Jens Grede and his wife, Emma Grede. The couple founded Frame, a line of modern casualwear, and Good American denim, which is known for its size inclusivity. They’ve also worked with Steven Klein on a Skims swimsuit commercial.
Jens, CEO of Skims, said in 2021 to WWD, “Our objective is to establish a few generation-defining brands. I want Good American, Skims, and Frame to characterize this decade the way Guess, VS, and Calvin Klein did in the ’90s.
That’s a lofty goal and one that Skims if it continues to expand, might assist and facilitate.
With an IPO, Skims would have access to a new market of Wall Street investors, a new currency in the form of freely tradable stock, and a whole new set of users.
The stock market will appreciate the company even more if revenues continue to increase, potentially expanding through retail, and mirroring Kardashian’s global reach.
Investors are a fickle bunch who will rapidly abandon companies that fail to live up to their lofty growth projections and promises.
Many 2021 IPOs, including once-hyped companies like Warby Parker Inc. and Allbirds Inc., have seen their valuations drop after colliding with market realities.
Despite concerns about consumer spending, high borrowing rates, and everything else, the IPO cycle appears to be beginning again.
However, unlike the direct-to-consumer companies that dominated the IPO wave two years ago, the companies seen as IPO contenders this time look to have greater growth potential.
Fast fashion behemoth Shein may also make its debut, with some suggesting that it will be an IPO with a valuation in the $60 billion region, while Birkenstock is also debating the idea with its financiers.
The New Fashion Guard: Will They Be Here to Stay?
While some labels, such as Savers, have already seen their popularity soar, others, such as Rihanna’s Savage x Fenty, are still waiting to see if the new generation of fashion fans will stick around.
However, the market is highly unpredictable due to the interplay of numerous factors such as persistent inflation, high-interest rates, consumer attitude, and geopolitical and economic pressures.
Meanwhile, reports indicate that Kardashian is preparing to sever ways with her Coty Inc.
The cosmetics conglomerate paid $200 million (at the time, the market value of the KKW Beauty brand was $1 billion) for a 20 percent ownership in Kim Kardashian’s beauty business in 2021.
However, there are rumors that the millionaire is negotiating to regain control of her cosmetics company.
The Wall Street Journal published reports about the beauty industry, but neither Coty nor a representative for Kardashian responded promptly to requests for comment.
Nonetheless, Jefferies analyst Ashley Helgans has hypothesized that a dual listing in New York and Paris could be a desirable alternative for Coty.
She stated that even if the brand’s value has decreased, debt reduction was a top objective for Coty and the repurchase might speed up deleveraging efforts.
Since Coty’s involvement, the company has launched Skkn, a high-priced luxury skincare line. One of the best-selling goods, according to Coty CEO Sue Nabi, is not a product at all but rather the entire collection, which sells for $673.
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The title should be unique and memorable, and it should stand out from other titles.
Rihanna’s Fenty Beauty and Savage x Fenty have paused makeup and perfume releases, but there are rumors that more products are coming soon.
Makeup and scent were thought to be on the way back for the company, Helgans explained. Due to the suspension of the KKW brand, we believe that current brand sales are just a fraction of what they were in 2021 and that the price for the 20% interest would be less than the $200 million given to Kim at that time.
Coty has collaborated with Kardashian’s sister Kylie Jenner in a similar arrangement. In 2019, Coty paid $600 million for a 51% share in Jenner’s company, Kylie Cosmetics.
Coty has lately increased its forecasts for the 2019 fiscal year’s fourth quarter and a full year. New projections put quarterly like-for-like sales growth between 12 and 15 percent for the three months ending June 30 and full-year improvements between 10 and 11 percent.
The negotiations with Coty are happening independently of Skims’ current funding round.