Between Kylie Jenner And Kim Kardashian West, Who Is The Richest?
Kylie Jenner and Kim Kardashian West, who owe their fame to a 19-season reality TV show, are also businesswomen who market their products. Both have set up their cosmetics brand; but for which of the two half-sisters is this activity the most profitable?
Back in January, it looked like Kylie Jenner had made the deal of a lifetime by selling just over half of her Kylie Cosmetics brand to publicly traded multinational Coty. As part of this transaction, his company was valued at $ 1.2 billion. But information was lacking on the record, proving that the young woman was actually less profitable and less wealthy than what the family had spent years leading the cosmetics industry and the media to believe.
Based on this information, Forbes last May reduced its estimate of Kylie Jenner's net worth to $ 900 million, at the same time removing her status as the world's youngest billionaire. Since then, sales of Kylie Cosmetics have fallen dramatically, held back by the pandemic. Today, Forbes estimates his net worth at $ 700 million.
Meanwhile, her half-sister Kim Kardashian West signed a deal in June to sell Coty a 20% stake in her cosmetics company KKW Beauty, which values her company at $ 1 billion. Taking into account the weakness in cosmetics sales since then, Forbes now calculates Kardashian West's fortune at $ 780 million.
For the two sisters, the sale of part of their company shares to Coty represents a boon to the fortunes of their mother, Kris Jenner, who is also their manager. According to our calculations, the latter owns 4.9% of Kylie Cosmetics and 8% of KKW Beauty, and obtained 10% of the sales proceeds. For the first time, Kris Jenner is on the list of America's Richest Women this year, with an estimated fortune of $ 190 million.
In retrospect, Coty's takeover of part of Kylie Cosmetics proved unsuccessful. According to an August document from the multinational, Kylie Cosmetics' turnover for the first half of 2020 was only $ 52 million, compared to $ 200 million for the full year 2019. For Coty, this drop is due to the pandemic: manufacturer Seed Beauty closed for much of the spring, as did Ulta stores, the exclusive retailer of Kylie Cosmetics.
Given this setback, Forbes estimates that the young woman's stake in Kylie Cosmetics is now worth $ 300 million. The rest of his fortune comes from an estimated $ 400 million in cash, cars, real estate and other investments, much of which comes from the $ 340 million after-tax pocketed last January when the 51% sale was made. of his brand to Coty for $ 1.2 billion.
But Kim Kardashian West's KKW Beauty cosmetics line has also been hit by the pandemic, as the two companies share the same manufacturer and retailer. Forbes estimates that Kim Kardashian West's 72% stake in KKW Beauty is worth around $ 500 million, slightly less than Coty's implied valuation of $ 1 billion last June. The rest of the star's fortune is made up of cash, real estate and other investments, and does not include any assets from her husband, billionaire Kanye West.
Even before the pandemic, the initial ratings Coty made for Kylie Cosmetics and KKW Beauty were relatively high compared to the rest of the industry. Indeed, the multinational has acquired 51% of Kylie Cosmetics at a price corresponding to approximately 7 times the amount of sales, while the average in the sector is rather about 6 times.
Some sources say Coty is used to overpaying companies. On the other hand, KKW Beauty and Kylie Cosmetics rely on fame, fickle business in a world where people can easily disappear. Typically, this factor significantly lowers the value of a beauty brand. Ahead of the sale, industry experts claimed Kylie Cosmetics would be worth more than three times its annual revenue.
Beauty industry veteran Jeffrey Ten, who has been at the helm of Note Cosmetics, Nyx and Calvin Klein Beauty, says: “Coty has yet to prove itself, especially when it comes to quality makeup. They’re known as a mass market brand, and they paid a lot of money for something they don’t have much experience with. Today, with the coronavirus, the makeup world is under enormous pressure. "
Coty, whose shares have fallen nearly 70% since the start of the year, was keen to offer a bounty to get part of the two companies, betting that the collections of the two stars could turn his business around. As Coty’s CFO said when announcing the deal with Kylie Jenner, Kylie Cosmetics could "make Coty a modern, growing and profitable player in the beauty industry."
But no matter which of her daughters takes the biggest slice of the pie, Kris Jenner comes out on top. The mastermind behind the Kardashian-Jenner business empire has made an impressive fortune from the regular income she earns from the Keeping Up With the Kardashians reality show, as she earns around $ 100,000 per episode as a executive producer. She also receives a 10% commission on all monies pocketed by her daughters.
As a reminder, the contract signed between Kylie Cosmetics and Coty contains a clause that indicates that Kris Jenner owns a share of Kylie Cosmetics (which Forbes assumes to be a standard package). The file indicates that the KMJ 2018 Irrevocable Trust, controlled by the mother of the family, has a stake in the profits of Kylie Cosmetics which turns into a stake in the sale of the company. A spokesperson for the Jenner family first said that the trust contained the money Kylie received as a minor, and that she was the sole beneficiary.
Still, the trust appears to have been created after the young woman turned 18, and the Jenners have refused to provide any evidence to back up their claims. Since KKW Beauty is almost identical to the model from Kylie Cosmetics, so we assume that the mother also has a 10% share of the 80% attributed to Kim Kardashian West. Kris Jenner's stakes in Kylie Cosmetics and KKW Beauty together are worth around $ 90 million. By our calculations, she also owns $ 100 million in income and real estate, including around $ 50 million from deals her daughters signed with Coty. A family spokesperson declined to comment.
