Is Kim Kardashian's Skims Now Worth $5 Billion?

Skims, the shapewear brand co-founded by Kim Kardashian, has successfully raised $225 million (£171.5 million) in funding, elevating its valuation to $5 billion. This investment will largely focus on expanding its retail presence globally, aiming to enhance its competitiveness in the ever-growing shapewear and athleisure markets.

Last updated: 10 October 2023 (BST)

What’s happening now

Skims is leveraging its latest funding round to accelerate its expansion plans, particularly in physical retail. With a valuation of $5 billion, the brand is positioning itself for substantial growth amid rising competition from established players like Lululemon. This funding is one of the most significant for a US consumer brand in 2023, reflecting investor confidence in Skims' business model and market potential.

Key takeaways

Skims has raised $225 million, increasing its valuation to $5 billion.
The funding will support global retail expansion, focusing on physical stores.
Sales are projected to exceed $1 billion this year, bolstering confidence in long-term growth.
Skims aims to innovate within the shapewear and athleisure markets, facing competition from brands like Lululemon.
The brand has a strong influencer marketing strategy, utilising celebrity endorsements.

Timeline: how we got here

Skims was founded in 2019, debuting with a shapewear line that quickly gained traction. Key milestones include:

2019: Launch of Skims with a focus on shapewear.
2020: Rebranding from Kimono Intimates following criticism over cultural appropriation.
2021: Expansion into loungewear and other fashion categories.
2023: Raised $225 million, increasing valuation to $5 billion.

What’s new vs what’s known

New today/this week

The latest news revolves around Skims raising a substantial $225 million in funding, with plans to increase its retail footprint globally. This funding round is significant, coming from notable investors such as Goldman Sachs and showcasing Skims' robust growth potential.

What was already established

Skims has been steadily growing since its inception in 2019, expanding from shapewear into broader fashion categories. The brand has successfully created a strong market presence and a loyal customer base, aided by extensive celebrity endorsements and influencer partnerships. Its projected sales of over $1 billion this year underline its competitive positioning within the shapewear and athleisure sectors.

Impact for the UK

Consumers and households

For UK consumers, Skims’ expansion could mean greater access to its products as the brand opens more stores internationally. This may also enhance competition in the shapewear market, potentially leading to more options and better pricing for consumers.

Businesses and jobs

As Skims grows, it will likely create new jobs both within the retail sector and through its supply chain. This can stimulate local economies in regions where new stores are established. Additionally, increased competition could benefit existing retailers in the shapewear and athleisure sectors by pushing them to innovate and improve their offerings.

Policy and regulation

Any significant expansion into the UK market may involve navigating regulatory requirements related to retail operations and product safety. Skims will need to ensure compliance with UK laws as it establishes a physical presence, including adhering to consumer protection regulations and potential tariffs on imported goods.

Numbers that matter

£171.5 million: The amount raised in the latest funding round.
$5 billion: Skims' current valuation post-funding.
$1 billion: Expected sales for Skims in 2023.
18: Number of Skims stores currently operating in the US.
2019: Year Skims was founded.

Definitions and jargon buster

Shapewear: Garments designed to shape the body to achieve a desired silhouette.
Athleisure: A trend in fashion where clothing designed for workouts is worn in other settings, such as casual or social occasions.
Goldman Sachs: A global investment banking, securities, and investment management firm.

How to think about the next steps

Near term (0–4 weeks)

In the upcoming weeks, observers should watch for announcements regarding specific locations for new stores and any new product lines that Skims may introduce as a result of this funding.

Medium term (1–6 months)

Over the next several months, Skims will likely focus on executing its expansion plans and may reveal strategies to enhance its online presence alongside physical retail growth. Keeping an eye on consumer response to these initiatives will be crucial.

Signals to watch

Announcements of new store openings in the UK and other markets.
Sales figures reported for the upcoming financial quarters.
New product launches and marketing campaigns leveraging influencer partnerships.

Practical guidance

Do

Stay informed about Skims’ product launches and retail openings.
Consider the brand's offerings in the context of personal needs and existing competition.
Engage with influencer campaigns to gain insights into new products and trends.

Don’t

Overlook the importance of price comparison with competitors.
Assume that Skims' products are the only option available in the shapewear market.
Ignore reviews and feedback from other consumers when making a purchase decision.

Checklist

Research Skims’ offerings to understand product suitability.
Follow the brand on social media for updates on launches and promotions.
Compare prices and features with similar brands like Lululemon.
Check for customer reviews and testimonials before buying.
Monitor sales data to assess the brand's market performance.

Risks, caveats, and uncertainties

The retail landscape, particularly in fashion, is highly volatile. Skims faces challenges from established competitors and potential economic downturns that could impact consumer spending. Additionally, the brand's reliance on celebrity endorsements could backfire if public perception shifts. Investors should be cautious of these factors as they assess Skims' future growth.

Bottom line

Skims is poised for significant expansion following its recent funding, indicating strong market confidence. As the brand seeks to solidify its presence in the global retail landscape, consumers can expect increased accessibility to its products. The evolving competition in shapewear and athleisure will require Skims to continually innovate and adapt to maintain its momentum.

FAQs

What is Skims known for?

Skims is known for its shapewear products that aim to provide body contouring solutions. The brand has expanded its offerings to include loungewear and athleisure, appealing to a broad audience.

Who co-founded Skims?

Skims was co-founded by Kim Kardashian, who has played a significant role in promoting the brand through her extensive celebrity influence.

How much funding has Skims raised?

Skims has raised $225 million (£171.5 million) in its latest funding round, bringing its total valuation to $5 billion.