Such a worldview is more in line with a naïve 20-year-old than a near-billionaire mogul (Jenner, of course, is both). It seems far-fetched to think the brand, whose customers are mostly women ages 18 to 34, will last that long, much less independently. Especially with a business tied to the fickle world of personal fame. Stars fall out of public favor or lose interest. And others see the gravy train and jump in. Capitalizing on her front-row view, Kardashian West founded her own line, KKW Beauty, in June 2017 and has already nabbed an estimated $100 million in revenue. Rihanna followed in September with Fenty Beauty, which focuses on color-inclusive shades, in partnership with LVMH division Kendo.
“All of them could change their minds,” Shannon Coyne, an equity research analyst at BMO Capital Markets, says of the influx of celebrity makeup entrepreneurs. “Kylie seems to want to create this beauty empire, but anything can happen, and she’s so young.”
Kylie Cosmetics’ growth is already starting to taper off: After leaping to $307 million in 2016, revenue grew just 7% in 2017, despite the addition of 30 new products. Forbesestimates lip-kit revenue dipped 35% from approximately $153 million in 2016 to $99 million in 2017. Still, Kris Jenner says revenue is up “considerably” in the first six months of 2018 compared with the same period last year–a claim that Forbes couldn’t verify.
While Jenner dismisses the idea of selling out, her calculating mother–who got paid an estimated $17 million by her daughter in the past year–can do the math. “It’s always something that we’re willing to explore,” she says.
Would someone buy it? “It could easily be an instant game-changing acquisition for any company on the hunt for a winning brand with a younger customer,” says Tara Simon, senior vice president of merchandising at cosmetics giant Ulta.
But celebrity lines cannot command valuations anywhere near the six times revenue that other beauty brands demand because of the volatility of relying on one name to sell a product. Kylie Cosmetics could certainly sell for half that, or three times sales, which is where Forbes places its valuation. “They’re not looking to be sustainable brands,” said Mintel’s Sarah Jindal, referring to Kylie Cosmetics and KKW Beauty. “In a couple of years it wouldn’t surprise me if she was on to something else. When you are leveraging your name, you can turn it into anything you want to sell.”
When you can make such quick cash, who needs a big exit? Kylie Cosmetics has already generated an estimated $230 million in net profit. And sometime later this year, its owner will likely take a title that Bill Gates and Mark Zuckerberg once held–youngest-ever self-made billionaire, redefining in the process the very nature of “self-made.” It’s quite a world we live in.
Reach Natalie Robehmed at [email protected] Cover image by Jamel Toppin for Forbes.