What do we know about the Skims IPO?
Kim Kardashian’s iconic shapewear brand, Skims, is reportedly exploring an IPO sometime in 2024, according to Bloomberg. The direct-to-consumer clothing line has grown considerably in the past three years thanks in part to its high-profile founder and other celebrity endorsements, differentiating the company from other recent IPOs we’ve seen.
Investors are hungrily awaiting new opportunities after 2023’s IPOs failed to revive the stagnant market. Companies like ARM, Klaviyo, Birkenstock and Instacart all went public in the latter half of 2023, but their share prices soon fell below opening prices.
Executives seem to have higher hopes for 2024, with companies like Skims, Reddit and Shein all preparing to go public. Analysts from Bank of America said in a statement they expect inflation to fall and equities to reach new highs in the coming year, suggesting a more favourable environment for IPOs where lower rates spur investor interest in speculative assets like newly debuted stocks.
SKIMS appears to be seeking to capitalize on an impending bullish market. Jens Grede, the Swedish entrepreneur who co-founded the company with Kardashian, indicated an IPO is on the horizon for the wildly popular shapewear line after SKIMS secured a $270 million funding round earlier this year that valued the brand at $4 bn. It’s unknown what valuation Skims is targeting for its IPO, but some analysts suggest the company is worth twice as much as its current value.
Skims has also hired former Nike executive Andy Muir as Chief Financial Officer, an appointment typically seen as preparation to go public.
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What is Skims?
Skims is a direct-to-consumer clothing brand co-founded by American media personality Kim Kardashian that sells shapewear, swimwear, underwear and loungewear. In October 2023, the company announced a men’s line in production.
Promoted by co-founder Kim Kardashian and other high-profile celebrity partnerships, Skims products regularly sell out soon after dropping online. CEO and co-founder Jens Grede claims more than 11 million people have signed up for product restock alerts on the Skims website.
The brand highlights its inclusive shade range, creating discreet shapewear for all skin tones. Within three years of launching, the company was valued at more than $3.2 bn and included on TIME’s 2022 List of 100 Most Influential Companies of the Year.
In 2024 the company plans to erect a 5,000-square-foot flagship location in Los Angeles, then more locations in New York City and other US cities that attract international tourism.
How much is Skims worth?
Skims was last valued at $4bn in July 2023 during its most recent funding round led by Wellington Management Group. The company raised $270mn during the round, bringing its total equity raised to $670mn.
Is Skims profitable?
Skims CEO Jens Grede declared the company profitable in a press release following the company’s July fundraising round. Grede announced an expected revenue of $750mn for 2023, up 50% from $500mn in 2022, and an estimated net profit of $190mn by year end.
Who are Skims’s competitors?
Skims’s competitors include women’s shapewear and swimwear brands like SPANX, ThirdLove and MeUndies. However, Skim’s largest competitor is another celebrity-helmed loungewear brand: Savage X Fenty. The company was founded by American singer Rihanna in 2018 and is estimated to be valued at more than $3 bn.
Kim’s sister, Khloe Kardashian, also launched a clothing brand with the Gredes featuring denim, shoes, swimwear and activewear called Good American. The company was last valued at $3.2mn during a funding round in 2023 and features a flagship location in Los Angeles.
While there are differences between these celebrity lines, it’s useful to compare business strategies and financial metrics among Skims, Savage x Fenty and Good American to gain a better understanding of the entire sector and how interested consumers are in celebrity-founded brands.
Who owns Skims?
Skims is owned by its co-founders: Kim Kardashian, Jens Grede and Emma Grede. Kardashian owns an unknown majority of the company, with Jens Grede being the second-largest shareholder. Private equity firms Wellington Management Group, DI Capital Partners, Imaginary Ventures and Greenoaks Capital Partners have all participated in fundraising rounds and own shares of the company.