The popularity of SKIMS, the apparel brand co-founded by Kim Kardashian, continues unabated.
In just four years since its founding, the brand has quadrupled its valuation to become a unicorn company; in 2022, investors gave the company a valuation of $3.2 billion, but a new round of financing this year raised $270 million, bringing its valuation to $4 billion.
Skims was founded in June 2019 by Kim Kardashian and Swedish entrepreneur Jens Grede. At launch, the company began as a seller of shapewear for form-fitting clothing.
“I really wanted to launch my own shapewear that took all of the designs that I was cutting up myself, that I was dying myself,” Kardashian said in a Wall Street Journal Magazine video.
She explains how she launched Skims, explaining that she couldn’t always find shapewear that matched her skin tone, so it was to provide options for women of different body types, skin tones, and ages.
However, the company has now expanded into a variety of clothing categories, including loungewear and swimwear, with shapewear no longer accounting for the majority of sales. The company also plans to expand into men’s clothing this fall. Once known for direct-to-consumer sales, the company plans to open its first flagship stores in Los Angeles and New York next year.
Skims social media as a community of customers
About 15% of the company’s online customers are from outside the U.S., and it is said that nearly 70% of all customers are millennials or Generation Z. In fact, at the limited-time pop-up store held at New York’s Rockefeller Center in May of this year, there were long lines of customers waiting for several hours each day, and it was obvious that most of the customers in line were Millennials and Gen Z.
Dissemination on social media channels such as Instagram and TikTok is also an important tool for Skims to attract customers. With over 5.26 million followers on Instagram, the brand uses its official account to announce new product launches and social campaigns. Each post receives many comments from followers, and the channel seems to serve as a customer service channel for buyers to provide feedback on what products they want and inquire when products will be restocked.
In addition, the brand has 1.2 million followers on TikTok. Its official TikTok account posts mostly user-generated content created by actual customers, where customer feedback and reviews are actively exchanged. Because anyone can post to the brand’s official account, some users share counterfeit products that resemble Skims. However, this is also a popular niche on TikTok, which is surprisingly driving awareness and demand for the original product.
Value added by the scarcity of hard-to-find products
This customer-oriented community building on social media is undoubtedly one of the brand’s main marketing strategies.
The brand is also actively using e-mail marketing to promote sales. Customers who subscribe to the brand’s mailing list receive, on average, five emails a week notifying them of new arrivals and restocks of popular items. The reason is that Skims products are often sold out and hard to find as soon as they go on sale. The added value of rarity adds to the brand’s products, and many people are eager to get their hands on them.
By sending out restock alerts via email to those who missed out, customers are encouraged to follow the brand more closely and purchase products as soon as they become available. In addition, Skims also sends out newsletters informing customers of retailer collaborations and direct access points to purchase.
Developing new prospects with Wellington Management
Skims CEO Grede announced that the company is currently profitable and projects sales of $750 million this year (up from $500 million in 2022). He also said that over the last year, 11 million people have joined the brand’s waiting list to purchase its popular products.
According to Grede, it was the company’s growth trajectory and popularity that attracted investors when the management initiated fundraising in the past few months. The round was led by Wellington Management, an asset management firm, with other participants including Greenoaks Capital Partners and existing backers D1 Capital Partners and Imaginary Ventures.
Michael Carmen, a co-head of private investments at Wellington said in a statement as follows. “Skims has maintained unprecedented momentum since the brand’s inception. We’re thrilled to partner with the brand to support it through this pivotal growth stage.”
The success of these Skims is perhaps the most outstanding of several businesses owned by Kardashian ranging from skincare and fragrances to a private equity firm. After the 2021 financing round, Kardashian has already joined the ranks of billionaires and remains the company’s largest shareholder, owning a majority stake along with Grede.
Aiming to be a public company
Today, with $270 million raised, Skims’ valuation has ballooned to $4 billion, and at the same time, Wellington Management, the lead investor in the business, is known for investing in companies before they go public. Given this background, one might ask, “When exactly does this apparel brand plan to go public?”
Grede mentioned that he and Kardashian are not in a hurry to go public, but noted that investors have shown interest in the consumer business in recent months. He also expressed his intention that going public remains one of the company’s goals, commenting that “At some point in the future, Skims deserves to be a public company.”