In a new Forbes list of America’s self-made richest women, it was revealed Keeping Up With the Kardashians star, Kylie Jenner is now worth less than older-sister Kim Kardashian West. Just a year ago, Kylie was falsely given the title of the youngest billionaire ever. How did she lose $200 million and the title of "richest Kardashian/Jenner" in just one year?
To understand where all of Kylie’s money went, you have to understand what exactly went down with the Kylie Cosmetics sale to Coty Inc. The beauty company acquired a 51% stake of Kylie Cosmetics worth $600 million in January 2020 after roughly eight months of negotiations. Coty was anxiously awaiting the acquisition so they could begin a journey towards marketing toward a younger company. The need to appeal to a younger demographic is what drove Coty to pursue a stake in KKW Beauty, Kim’s cosmetics company. Coty bought a 20% stake of KKW Beauty in July that launched the reality star close to the billionaire mark.
At the time of the deal with Kylie Cosmetics, the company was valued at $1.2 billion. This was quite an accomplishment considering Kylie Cosmetics was founded only six years ago. For years, the Jenner publicity team had been campaigning for Kylie to appear on the cover of Forbes. They began the campaign after Kim appeared on the cover for the success of her mobile game, Kim Kardashian Hollywood.
One aspect of the campaign was vehemently presenting inflated statements of the company’s earnings. Kylie Cosmetics seemed to be successful on a level unseen before in the beauty industry. Kylie was so successful that Forbes surmised she was on track to become the youngest self-made billionaire ever. If anyone was left questioning Kylie’s billionaire status, the deal seemingly erased all suspicions. Instead of assuaging the suspicions of the staff at Forbes, though, it created more. Documents released in the aftermath of the sale revealed earnings were significantly less than Kylie, Kris Jenner, and their team had previously claimed. Either Kylie Cosmetics had been lying about initial sales, or the business had tanked in recent years.
The documents also revealed Kylie owned a smaller portion of the company than analysts had previously thought. Documents revealed an Irrevocable Trust in Kris Jenner’s name would convert a profit interest of the company into an ownership interest upon the sale. Kylie only owns 44.1% of Kylie Coto $900 million for Kylie’s wealth, even with the $340 million she received from the sale.
Since then, Kylie Cosmetics’ earnings have dropped significantly per Forbes. Kylie Cosmetics’ earnings for the first half of 2020 measured in at $52 million compared to $200 million in earnings from 2019. This is largely due to Kylie Cosmetics manufacturer, Seed, and Ulta Beauty stores being closed for the start of the pandemic. Forbes currently estimates Kylie’s total net worth to be $700 million. Her stake in Kylie Cosmetics is worth $300 million while the remaining $400 million is composed of cash, luxury goods, and other investments.
In the future, Kylie Cosmetics’ profits will likely continue to drop. Shareholders are suing Coty for overpaying to acquire Kylie Cosmetics. Seed is also suing Coty and Kylie Cosmetics for disclosing private trade secrets in the deal. The negative press has affected sales as well as the company’s reputation. The success Kylie Cosmetics has had is a direct result of Kylie’s fame. So when Kylie’s celebrity starts to run out, the profits of Kylie Cosmetics will begin to run out too.
Realistically, Kylie Cosmetic doesn’t offer makeup that’s of supreme quality compared to other brands. There’s no team of dermatologists offering specific formulas for makeup that’s somehow revolutionary. Kylie Cosmetics doesn’t cater to a specific group in need of representation. Why buy makeup from a hyper-expensive company when you could get cosmetics of equal or better quality at a better price? When you buy Kylie Cosmetics, you’re buying the brand. And the brand is based entirely on Kylie’s image. Eventually, as times change, the appeal of Kylie’s image will die off.
She profits off of the culture’s obsession with unnaturally big hips, big lips, a tiny waist, and a large chest. Kylie famously has had her lips injected with filler so they appear larger. She also has (almost certainly) had surgical enhancements on the rest of her body. Just like this beauty standard is different from the skinny yet athletic standard of the 90s, this one will fall out of fashion too. And, luckily, it seems more realistic standards will be all the rage in just a few years.
For years, the Jenner team has been trying to market Kylie as a groundbreaking business-woman when she’s far from it. Years ago, Kris saw the opportunity to capitalize off of Kylie’s lip-filler scandal and jumped on it. Back then, it was Kim who had to encourage Kylie to be honest and up-front about the procedure. Granted, Kylie was still a child, but in the same vein, she had no idea how to build a brand or a business. Her whole reason for injecting herself with fillers was because a boy said she had small lips. To this day, Kris is the only other top executive at Kylie Cosmetics. In reality, Kris has built Kylie Cosmetics while Kylie was along for the ride. Kylie doesn’t stand for much other than a fantasy. Beneath the fantasy of expensive cars, a curvy body, and a huge company, is a reliance on attention and insecurity.
So the final question is, when will Kylie’s celebrity run out? Probably sooner rather than later. Keeping Up With the Kardashians will end in 2021 which takes away one avenue for Kylie to market herself and make headlines. Eventually, fans and critics will get tired of Kylie’s need to incessantly flaunt her wealth. Even her most hardcore fans will age out of the money and fame-hungry lifestyle. If Kylie becomes more mature and adjusts her persona to grow with her fan base, she may be able to sustain some level of interest. But eventually, Kylie’s star power will die out— and Kylie Cosmetics will die with it.
Source: Forbes