Four years into its existence, Skims, the apparel company co-founded by Kim Kardashian, has become a four-times unicorn.
Skims has raised $270 million in a new funding round that values it at $4 billion, the company plans to announce on Wednesday. This is higher than the $3.2 billion valuation given to the company by investors last year.
Ms. Kardashian and her business partner Jens Grede have sought to turn Skims into the next big apparel brand.
“It’s grown rapidly and we’re very proud of it,” Ms. Kardashian said in an interview. “We’ve had a really good flow of product launches.”
The company started as a seller of shapewear to help customers wear body-hugging clothing. But shapewear no longer represents the majority of its sales: Skims has expanded into a range of clothing categories, including loungewear and swimwear, with plans to branch out into menswear this autumn.
And once known for selling directly to consumers, Skims is betting on physical retail, with plans to open its first flagship stores in Los Angeles and New York City next year.
Mr. Grede, who is Skims’ chief executive, said in an interview that the company is now profitable and on track for sales of $750 million this year, up from $500 million in 2022. About 15 percent of its online customers come from outside the United States, and about 70 percent of its total customers are Millennials, or Gen Z-ers.
Last year, 11 million people joined waiting lists to buy the brand’s most popular items, which often sell out, he said.
Mr Grede said it was this growth trajectory and popularity that attracted investors to the company when executives began raising money in recent months. Asset manager Wellington Management led the latest round. Other participating firms include Greenoaks Capital Partners and existing backers D1 Capital Partners and Imaginary Ventures.
“Skims has maintained unprecedented momentum since the brand’s inception,” Michael Carmen, co-head of private investments at Wellington, said in a statement. “We are thrilled to partner with him to support the brand in this important growth phase.”
The success of Skims has been one of the biggest achievements in Ms. Kardashian’s business empire, which now includes skin care, fragrances and even private equity firm, Already established as a billionaire after Skims’ 2021 fund-raising round, Ms. Kardashian remains the company’s largest shareholder, and she and Mr. Grede still hold a majority stake.
Initially, Skims had to contend with pandemic-induced supply-chain disruptions, which made it difficult to obtain fabric for its garments.
According to Ms. Kardashian and Mr. Grede, key challenges now include managing inventory as the company expands its offerings and opens physical stores, as well as competing against companies offering deep discounts as consumers cut back on discretionary spending in the face of high inflation. It’s a problem that has plagued many retail companies, Ms. Kardashian said, and will be exacerbated by Skims opening their own stores.
Skims’ latest investment is likely to raise questions about when it intends to go public, given both the company’s rising valuation and Wellington’s involvement, which is known to invest in companies before they go public. The apparel maker has taken other steps to position itself for initial offerings, including hiring a chief financial officer last year.
Mr Grade balked at the timing, saying he and Ms Kardashian were in no rush. But he said investors have shown interest in the consumer-facing businesses in recent months.
And going public is one of the company’s goals. “At some point in the future, Skims will be entitled to become a public company,” he said.