Kylie Jenner to become the world’s youngest self-made billionaire

July 12, 2018

Photo: Courtesy Forbes

Kylie Jenner is on her way to becoming the world’s youngest self-made billionaire, reports Forbes.

What her half-sister Kim Kardashian West did for booty, Jenner has done for full lips. Like Kardashian West, she has leveraged her assets to gain both fame and money. But while her sister is best-known for the former, Jenner has proved adept at the latter. In historic fashion.

Just 20 when this story publishes (she’ll turn 21 in August) and an extremely young mother (she had baby daughter Stormi in February), Jenner runs one of the hottest makeup companies ever. Kylie Cosmetics launched two years ago with a $29 “lip kit” consisting of a matching set of lipstick and lip liner, and has sold more than $630 million worth of makeup since, including an estimated $330 million in 2017. Even using a conservative multiple, and applying our standard 20% discount, Forbes values her company, which has since added other cosmetics like eye shadow and concealer, at nearly $800 million. Jenner owns 100% of it.

Add to that the millions she has earned from TV programmes and endorsing products like Puma shoes and PacSun clothing, and $60 million in estimated after-tax dividends she’s taken from her company, and she’s conservatively worth $900 million, which along with her age makes her the youngest person on the fourth annual ranking of America’s Richest Self-Made Women. (Forbes estimates that 37-year-old Kardashian West, for comparison, is worth $350 million.) But she’s not just making history as a woman. Another year of growth will make her the youngest self-made billionaire ever, male or female, trumping Mark Zuckerberg, who became a billionaire at age 23. Ultimately their fortunes all derive from the same place. “Social media is an amazing platform,” Jenner says. “I have such easy access to my fans and my customers.”

That and a large dose of taste making are pretty much her entire business, an invention of the Instagram age. Hewlett and Packard immortalised the garage – Jenner has her (or her mom’s) kitchen table. Her near-billion-dollar empire consists of just seven full-time and five part-time employees. Manufacturing and packaging? Outsourced to Seed Beauty, a private-label producer in nearby Oxnard, California. Sales and fulfillment? Outsourced to the online outlet Shopify. Finance and PR? Her shrewd mother, Kris, handles the actual business stuff, in exchange for the 10% management cut she takes from all her children. As ultralight startups go, Jenner’s operation is essentially air. And because of those minuscule overhead and marketing costs, the profits are outsize and go right into Jenner’s pocket.

Basically, all Jenner does to make all that money is leverage her social media following. Almost hourly, she takes to Instagram and Snapchat, pouting for selfies with captions about which Kylie Cosmetics shades she’s wearing, takes videos of forthcoming products and announces new launches. It sounds inane until you realise that she has over 110 million followers on Instagram and millions more on Snapchat, and many of them are young women and girls – an audience at once massive and targeted, at least if you’re selling lip products. And that’s before the 16.4 million who follow her company directly, or the 25.6 million who follow her on Twitter, or the occasional social media assists from her siblings and friends.

Social media has weaponised fame to the point that a real estate mogul can be president and a 20-year-old from a family “famous for being famous” can approach billionaire status by monetising that to the extreme.

Photo: Courtesy Kylie Jenner’s Instagram

Given its perpetually young consumer base, the $532 billion beauty industry has always been inordinately driven by influencers and role models. As with fast fashion in clothing, Generation Z consumers have been eschewing lethargic makeup brands like L’Oréal, Estée Lauder and Coty in favor of quick-to-market products that they learn about via social media.

A former aesthetician for models like Cindy Crawford and Naomi Campbell, Anastasia Soare started selling eyebrow pigments and pencils through her Anastasia Beverly Hills in 2000. The line exploded when it reportedly joined Instagram in 2013 and began sending influencers free makeup to publicize the brand. Now with 17 million followers and products sold in 3,000-plus stores, Soare, 60, debuts on the self-made women’s list with an estimated $1 billion. Instagram also helped Huda Kattan, 34, make our list for the first time this year, with an estimated net worth of $550 million. A makeup artist turned digital influencer, with 26 million Instagram followers, she started Huda Beauty in 2013 after three years of blogging about cosmetics. In December the company sold a minority stake to private equity firm TSG Consumer Partners; its recent $1 billion valuation translates into five times retail sales.

Jenner’s massive and massively loyal following, however, puts her in a class of her own. The youngest daughter of Kris and Caitlyn Jenner (formerly Olympic gold medal decathlete Bruce Jenner), sibling of supermodel Kendall Jenner and half-sister of Kim, Kourtney, Khloe and Rob Kardashian, Kylie Jenner grew up under a microscope. The family’s Keeping Up With the Kardashians first aired when she was just 10 years old, beaming her onto television screens in more than 160 countries. Steered by their mother, Kris, each scion had a moneymaking scheme, from mobile gaming (Kim) to modeling (Kendall) and even socks (Rob), but the teenage Jenner felt adrift.

“I struggled for a minute with finding something to do on my own,” Jenner says. With her mother’s guidance, she started making seven figures as a model, notching endorsement deals with British retailer Topshop and Sinful Colors nail polish, among others.

In 2014, Jenner’s appearance became tabloid fodder as the size of her lips ballooned. On social media, teenagers popularised the “Kylie Jenner Lip Challenge,” a viral fad in which they inserted their lips into a shot glass and then sucked out the air. In May 2015, she admitted to having temporary lip fillers–and with Kris Jenner dusting off her Kim Kardashian playbook, she almost immediately cashed in on it. “I said, ‘I’m ready to put up my own money. I don’t want to do it with anyone else,'” Jenner recalls. She used some $250,000 of her earnings from modeling gigs to pay an outside company to produce the first 15,000 lip kits. An intuitive marketer like most of her family, she spent months teasing the kits on Instagram, then announced the launch via social media just a day before they went on sale–November 30, 2015. The kits sold out in less than a minute. Resellers started offering the $29 product on eBay for up to $1,000. “Before I even refreshed the page, everything was sold out,” Jenner says.

NEW YORK, NY – MAY 07: Kylie Jenner attends the Heavenly Bodies: Fashion & The Catholic Imagination Costume Institute Gala at The Metropolitan Museum of Art on May 7, 2018 in New York City. Photo: AFP

This is where Mom comes in again. As with all the Kardashian-Jenners’ ventures, Kris Jenner tends to drive the big moves. Sensing that this could be an ongoing business, not just a one-time stunt, she brought in e-commerce platform Shopify, run by billionaire Canadian entrepreneur Tobi Lutke, that December.

Kylie Lip Kits relaunched as Kylie Cosmetics on Shopify in February 2016, this time stocked with 500,000 lip kits in six shades. “You could watch the buildup happen on the store as [the launch time] approached,” says Loren Padelford, who runs the high-volume Shopify Plus. “To watch the internet focus down on one website was crazy.”

The numbers kept getting bigger. In November 2016 her holiday collection snagged nearly $19 million worth of orders in the 24 hours after it launched. By the end of 2016 Jenner’s company was selling 50-odd products, with revenue of $307 million–for a company less than a year old.

“No other influencer has ever gotten to the volume or had the rabid fans and consistency that Kylie has had for the last two and a half years,” adds Padelford, whose Shopify Plus also powers the online stores of Drake, Justin Bieber–and Kardashian West.

 
 

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