Skims hits a $5 billion valuation — right before activewear’s peak sales season

If you’re a celebrity with a large following, how do you cash in? The old path was to promote someone else’s product — but, in the new economy, big names are turning brand equity into equity equity.

And right now, the biggest in the fame-lending game is Kim Kardashian, whose shapewear brand, Skims, announced on Wednesday that it’s raised $225 million in new capital at a kolossal $5 billion valuation.

Celebrity Skim

The successful Goldman Sachs Alternatives-led funding round marks one of the biggest this year for a US consumer brand, with cofounder Kardashian describing the expansion push as a step toward becoming a “global omnichannel retail brand.”

Skims expects to top $1 billion in net sales in 2025 — a mere six years after its inception — as the all-important holiday season approaches. Meanwhile, long-suffering premium athleisure giant Lululemon will also be looking to the weeks ahead to boost its bottom(s) line.

Looking at Lulu’s slumping sales, the uplift the brand typically sees in Q4 could help to cushion a string of disappointing results; however, data from Google Trends shows defined spikes in search volume during the major winter sales events... perhaps indicating consumers don’t want to pay full price for $100-plus yoga pants.

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As interest in luxury Lycra rivals Alo and Vuori has also mounted, Skims’ success can be in part credited to its viral campaigns (searches for “skims” rose 278% week over week when that thong launched in October), as well as partnerships with brands like Nike — buzz that Lulu could be trying to replicate with its new NFL partnership.

Still, no company is flexing its star power quite like Skims, which might be the most valuable celebrity-backed brand ever, topping Beats by Dre (bought by Apple for $3 billion back in 2014) and Rihanna’s Fenty Beauty (worth approximately $2.8 billion).