Skims, a brand created by Kim Kardashian that specializes in underwear, loungewear and shapewear, is gearing up to establish its inaugural permanent stores in the coming year, as part of its expansion into both domestic and international retail markets.
Its flagship store in Los Angeles will launch during the first half of 2024, with a subsequent opening in New York. The 5,000-square-foot boutique in LA will be on Sunset Boulevard in West Hollywood, adjacent to popular streetwear destinations like Supreme and Kith.
“Kim and I can envision a future where years from today there’s a Skims store anywhere in the world you’d find an Apple store or a Nike store,” said Jens Grede, co-founder and chief executive officer of Skims. “It marks the second chapter.”
Skims initially launched as a direct-to-consumer (D2C) venture in 2019 but has since expanded its physical retail by partnering with department stores like Nordstrom and Saks Fifth Avenue. In recent times, Skims has embraced temporary shop-in-shop concepts at locations such as the Selfridges in London and Rockefeller Center in New York.
Read also: Skims Taps Saks to Launch Shop-in-Shop Experience for Customers
Skims executives are planning to establish a minimum of four stores in the upcoming year. They are considering locations in markets known for regional tourism, such as Dallas, Atlanta and Miami.
Additionally, following tests in Paris and Hong Kong, Skims is contemplating the establishment of international flagship stores. On Skims’ online shop, about 20% of its customer base lives overseas.
“Our strategy going forward is to open important stores in the world’s most important cities,” Grede said.
Skims’ growth can be attributed to its expansion of product offerings beyond shapewear bodysuits. The brand has ventured into categories such as pajamas and swimwear, resulting in a substantial contribution from underwear sales. Skims is preparing to launch a men’s line in October, further diversifying its product portfolio.
In a financing round in 2022, Skims was valued at $3.2 billion. The brand has received funding of nearly $400 million thus far, with investments from hedge fund Lone Pine Capital and venture firms Thrive Capital and Imaginary Ventures. As for potential additional capital, Grede chose not to disclose any plans or intentions.
While both Kardashian and Grede have expressed interest in eventually taking Skims public, the CEO has clarified that there are no near-term plans for an initial public offering (IPO).
“Skims deserves to be a public company — when the time is right,” Grede said.
Skims anticipates reaching net sales of about $750 million in 2023, a big increase from the previous year’s nearly $500 million. Grede reports that the business has been experiencing a promising year-over-year growth rate of 75% thus far in the current year.
The move for Skims — a D2C brand entering in-store retail — allows the brand to capitalize on the power of omnichannel retailing. Through the venture, which has already been tested through pop-up experiences, Skims leverages the power of its online presence to drive foot traffic to physical stores while also offering seamless integration between online and offline shopping experiences.
However, the move comes at a time when retail is in its own mixed chaos of sorts.
For the past few years, the narrative has shifted from mere shoplifting to organized retail theft.
In the month of May, prominent retailers including Target, Dollar Tree, Home Depot, T.J. Maxx, Kohl’s, and Foot Locker cited inventory shrinkage, retail theft, or a combination of both as factors leading to decreased profits.
During its prior fiscal year, Target experienced a loss of around $763 million attributed to shrinkage. Additionally, the company anticipates loses of over $1 billion from shrinkage in its current fiscal year.
During the conference call, Brian Cornell, chairman and CEO of Target, conveyed profound apprehension regarding the escalating problem of retail theft. Cornell highlighted the extensive repercussions this issue has had on multiple merchandise departments across the country. He underscored that the situation was not showing any signs of improvement but rather deteriorating over time.
Read more: Target Faces Profit Losses, Rethinks In-Store Operations Amid Rising Retail Crime
In the first quarter, Foot Locker sang the same tune after witnessing a 4% decline in its margins compared to the same period the previous year. The company identified a dual impact as the cause for this decrease, pointing to significant discounting and an increase in retail theft.
Read more: Rising Organized Retail Theft Puts Pressure on Profits for Major Retailers
Today, there’s a new law in town and it’s taking on organized retail theft and the trade of counterfeit and hazardous goods on digital platforms.
“People deserve to know basic information about those who sell them consumer products online. By providing appropriate verification and transparency of high-volume third-party sellers, the INFORM Consumers Act will deter online sales of stolen, counterfeit, and unsafe goods and protect consumers,” said U.S. Sens. Bill Cassidy, R-La., and Dick Durbin, D-Ill., in a statement. “The bill is crucial to protecting Americans from scammers on the internet.”
Read more: 5 Key Things You Need to Know About the INFORM Act
And while the law focuses in on digital platforms, it does, in the long run, aid the issue retailers are having on the ground floor in-store.
So, will the Kardashian brand be able to override the drama with the INFORM Act by its side? (Insert Kardashian lawyer joke here. We couldn’t think of one).
We’ll find out in 2024.