The New York Times reports that Kim Kardashian’s shapewear company, Skims, has secured a $270 million investment package, valuing the company at $4 billion.
Together with Jens and Emma Grede, Skims launched in 2019 as a direct-to-consumer shapewear brand, and the company’s inclusive and body-positive ethos has been well-praised.
The first retail relationship for the brand occurred in 2020 with Nordstrom. Then, sometime during or after the epidemic, it shifted its focus to supply the increasingly in-demand loungewear. And by 2022, it has expanded into selling swimwear. It also debuted an athletic clothing line in January.
There were rumors that by 2022, they had raised approximately $400 million in venture capital. Last week, Wellington Management led a $270 million investment round for Skims, which included Greenoaks Capital Partners, D1 Capital Partners, and Imaginary Ventures.
The New York Times reports that Skims is gearing up to debut its menswear line, open its first two flagship stores in Los Angeles and New York, and consider going public.
Reasons why the agreement to fund Skirts Matter (Skims)
Neither Greenoaks Capital nor Skims responded to a request for comment, but it is safe to assume that the investor views Skims as one of the most significant shapewear brands to debut since Spanx. It has taken a popular product and improved it to meet consumer preferences.
Sales should reach $750 million this year, up from $500 million last year, and 11 million individuals have joined the waitlist.
In an exclusive interview with Just Style, Alice Price, associate clothing analyst at GlobalData, explained that before the introduction of Skims to the market, shapewear was “largely synonymous with the concealment and restriction of natural curves.”
Skirts revolutionized the shapewear industry with its emphasis on and celebration of the female form. Celebrity-owned brands, such as Rhianna’s Fenty Beauty, Kylie Kardashian’s Kylie Cosmetics, and Selena Gomez’s Rare Beauty, are extremely popular among consumers, and with Kim Kardashian as the face of the brand, Skims represents a lucrative opportunity for investors.
She continues by saying the brand’s expansion into knickers and loungewear has increased its popularity. Customers who still prefer laid-back fashions after the pandemic will appreciate the emphasis on comfort and the use of soft, flexible materials.
GlobalData retail analyst Neil Saunders, though, thinks the business is unlikely to rush to go public despite receiving significant interest from investors.
It will need assurance that there is an appetite from investors and that it can achieve a solid valuation,” he tells Just Style. The consumer market is currently pretty flat, yet Skims is an attractive firm in this space.
He explains that investors are excited about the shapewear category in general since it is a growing sector of the industry that aligns with “several consumer trends,” but that Kardashian herself is a huge draw.
He explains, “Skims is expanding beyond shapewear so investors see a lot of potential for future growth.”
Lessons that can be applied to the fashion industry
Skims is part of an enormously promising and as-yet-untapped market.
Grandview Research estimates that between 2021 and 2028, the worldwide market for shapewear will increase from its 2020 valuation of $1.9bn at a CAGR (compound annual growth rate) of 8.0%. According to Grandview Research, the market would be worth $3.7 billion by 2028.
The report notes that while innovations in technology and tailoring have fueled growth, the whole idea of shapewear is evolving. “Shapewear companies have been challenged by cultural shifts towards body acceptance and inclusivity to rethink conventional expectations and market their products in a more approachable, modern way, attracting a new set of clients.
Is there anything else that companies can do to replicate shapewear’s success?
First and foremost, you have to compete to win. Many well-known companies will likely enter the shapewear market or broaden their current selection by forming partnerships with smaller and medium-sized enterprises in the near future.
Saunders predicts that collaborations between fashion labels will increase. Brands like NIKE and adidas, which are experimenting with shapewear, will most likely associate their new products with improved athletic performance and wearer comfort.
Getting popular companies to enter the shapewear market may be difficult since I believe there is a big gap between the two categories. Although there is considerable crossover between the two groups, each category caters to a distinct set of readers.
A shapewear company’s success will also depend on how innovative their products are. Grand View Research uses Skins International’s warp-knitted compression garments to show how compression can increase sports performance. Sankom Switzerland, on the other hand, has made a range that includes antibacterial and skin-soothing aloe vera.
At the end of the day, shapewear labels need to be “fluid” and adaptable. Demand from consumers is ever-evolving, and shapewear has progressed from being size- and color-specific to being more accepting of a wide range of bodies. The ability of brands to adapt to shifting consumer preferences depends on their intimate relationship with those consumers.