After four years of existence, Skims, the apparel company co-founded by Kim Kardashian, has become a four-time unicorn.
Skims has raised $270 million in a new funding round that it values at $4 billion, the company also plans to announce Wednesday. That’s higher than the $3.2 billion valuation investors gave the company last year.
Ms. Kardashian and her business partner, Jens Grady, have sought to turn Skims into the next big clothing brand.
“It’s grown quickly and we’re proud of that,” Ms. Kardashian said in an interview. “We’ve had a really good flow of product launches.”
The company started as a lingerie seller helping customers wear body-hugging clothes. But underwear no longer accounts for the majority of its sales: Skims has expanded into a range of apparel categories, including sleepwear and swimwear, with plans to expand into men’s apparel this fall.
Once famous for selling directly to consumers, Skims is betting on physical retail, with plans to open its first flagship stores next year in Los Angeles and New York City.
Skims CEO Mr. Grady said in an interview that the company is now profitable and is aiming for $750 million in sales this year, up from $500 million in 2022. About 15 percent of its online customers come from outside the United States. US, and nearly 70 percent of its total customers are millennials or Generation Z-ers.
Over the past year, he said, 11 million people have joined queues to buy the brand’s most popular items, which often go on sale.
It is the trajectory of growth and popularity that has drawn investors to the company as executives began raising money in recent months, according to Greedy. Asset manager Wellington Management led the latest round. Other participating firms include Greenoaks Capital Partners and current backers D1 Capital Partners and Imaginary Ventures.
“Skims has maintained unprecedented momentum since the brand’s inception,” said Michael Carmen, Co-Head of Private Investments at Wellington, in a statement. “We are thrilled to be partnering with the brand to support it during this pivotal growth phase.”
Skims’ success has been among the biggest highlights of Ms. Kardashian’s business empire, which now includes skin care, fragrance, and even Private Equity Company. Already minted as a billionaire after Skims’ 2021 fund-raising round, Ms. Kardashian remains the largest single shareholder in the company, and she and Mr. Grady still own a majority stake.
Early on, Skims had to grapple with supply chain disruptions from the pandemic that made it difficult to source fabrics for its clothing.
The big challenges now, according to Ms. Kardashian and Mr. Grady, include inventory management as the company expands its offering and opens physical stores, as well as competing with companies offering deep discounts as consumers reduce discretionary spending in the face of soaring inflation. It’s an issue that has bothered many retail businesses, Kardashian said, and it will become more pressing as Skims opens its own stores.
Skims’ latest investment is likely to raise questions about when it intends to go public, given the company’s inflated valuation and the involvement of Wellington, which is known for investing in companies before they go public. The apparel maker took other steps typical of companies positioning themselves for initial offerings, including hiring a chief financial officer last year.
Mr. Grady took issue with the matter of timing, saying he and Mrs. Kardashian weren’t in a hurry. But he noted that investors have shown interest in the consumer business in recent months.
Offering them to the public remains one of the company’s goals. “At some point in the future, Skims deserves to be a public company,” he said.