For the Skeptics. How Kylie Jenner Proved She Really Is a Billionaire After Sale of a Portion of 'Kylie Cosmetics'

Dec 9, 2019 @ 18:05 EST
Kylie Jenner Sold 51% of Kylie Cosmetics to Cody Inc. for $600 million, ensuring she is a billionaire and shutting up the skeptics.

Our hope is that you've come across this article after going through our main one about 'Kylie Jenner Net Worth' content. It's quite an extensive one. It includes heavy details of 'Kylie Cosmetics'.

When Forbes released an article in 2018, at a time Kylie Jenner wasn't yet a billionaire, questions arose over the legitimacy of the claim. The skeptical part about the article was that her pioneer beauty brand, Kylie Cosmetics, was already worth $800 million. With significant earnings until the end of 2018, Forbes again officially declared her the youngest self-made billionaire in the world in March 2019.

Now 49% owner of Kylie Cosmetics, Kylie Jenner is worth $1 billion... Almost.Kylie Jenner is worth $1 billion... Almost.
Source: Alpha Coders

While some were straight out flushing the idea by claiming she was just kissing up to Forbes (not to sound rude) and sending them false data, some took out the facts that her personal net worth never reached the mark. Even Celebrity Net Worth was skeptical at one point (check out all their articles related to Jenner not being a billionaire, but they later do admit they were wrong. Fair play).

When the deal with Coty Inc. went off in mid-November 2019, involving cash instead of just shares, the Kylie Cosmetics (now with a different name) was suddenly (not so much) $1.2 billion. So, she seems to have disproven the skeptics, but her billionaire status is still up for debate — she's still technically off by $12 million. But hey, where's all that money the company makes going to go?

A Particular Phrase from a Forbes Article, That Declared Her the Youngest Self-Made Billionaire Before She Became One and Then the Next One, Were Skeptical to Some

The Forbes article, dated July 11, 2018, was titled How 20-Year-Old Kylie Jenner Built A $900 Million Fortune In Less Than 3 Years, but it had the cover of their August 31, 2018 Issue depicting Kylie Jenner as the frontwoman for female billionaires. However, duly note that they only prepared to welcome her into the billionaire elite group. "She's set to be the youngest-ever self-made billionaire...," it read. And they valued the company at $800 million. Shocking to many as it was only a few years ago she started the company. [Again... The story is found in our Billionaire's Club section.]

Kylie on the cover of August 2018 issue of Forbes. Kylie Cosmetics was valued at $900 million back then.On the cover of August 2018 Issue of Forbes.
Source: Forbes

It was thought to be a clickbait article at first. Especially, since they basically said Jenner made $330 million sales & $100 million in profit in 2017 and made a huge multiple to value Kylie Cosmetics at $800 million. The math seemed fuzzy with no taxation considered. The ambiguous line - "After leaping to $307 million in 2016, revenue grew just 7% in 2017, despite the addition of 30 new products. Forbes estimates lip-kit revenue dipped 35% from approximately $153 million in 2016 to $99 million in 2017."

Don't mess up your brain to get what they meant. It's not that ambiguous. Plus, a balance sheet can get tricky for a normal person to get a hold of.

Another supposed-clickbait headlined article was released by Forbes in early March 2019 congratulating her on being an official billionaire. It got tax calculators on their feet. The $100 million profit makes a valuation of 4X amount of $400 million, if it were ever sold. Her assets of around $60 million, 20% to the US Treasury for long-term capital gains and 13% to the California Franchise Tax Board led to a net worth of just $328 million.

Acknowledging their 'self-made' title for Kylie Jenner caused heated debate all over the social media and the internet, Forbes jumped in to defend her. Of course, she had a lot of help in kickstarting and running her company. But that doesn't necessarily mean she inherited any amount of her money to start it. Again, in our net worth article, we did mention she used the money she got from modeling to launcher her original Kylie Lip Kit brand.

If they're just talking finances, technically, yes, I don't have any inherited money. But I have had a lot of help and a huge platform.

Don't focus on the latter part of that statement from Jenner, isolate them all and understand what they meant. People paid no attention to the profit the company made after 2017, even if the numbers were unverifiable. She owned 100% of the company, and even if she managed to sell the whole company for eight times the 2017 profit, she would be left with $636 million net worth. The valuation was always considered to be over the top.

However, the mother-of-one came up with a transfer that would soon change the definition of the skeptics (it's not her intention though). Although, many will still disagree.

Jenner Sold Majority of 'Kylie Cosmetics' to 'Coty Inc.' for $600 Million and Renamed It 'Kylie Beauty', Thus Silencing the Doubters

On November 18, 2018, it was announced that the 22-year-old would be selling the majority portion (51%) of Kylie Cosmetics to historically Nazi-tied Coty Inc. The value was given to be $600 million for the 51% with the new name to be given as Kylie Beauty. That valuation led the company to be worth around $1.2 billion, with the other 49% stake ($588 million) to still be held by Kylie. A while later, the deal was said to be sealed in all cash.

What was surprising about the deal was that Coty was willing to pay Kylie 27 times her current profit. In comparison, Facebook trades at 26X multiple, while Coty itself trades at 18X. The multiple is based on the statement that Coty released during the majority takeover announcement.

The new majority owners claim the 2019 revenues from now Kylie Beauty to be about $177 million, about 50% less than last year. Since Kylie Cosmetics operated at a 25% margin (their EBIDTA margin), the 2019 profits would be $44 million to get a $1.2 billion valuation. Talk about getting paid 27 years salary in advance upfront, in cash. The deal is expected to be closed in the third quarter of 2020.

Her own value of $588 million + $300 million non-cosmetic net worth + $100 million of separate fortune makes her net worth to $988 million, but for a celebrity earning $20-30 million per year besides the cosmetics company, you're already looking at a billionaire. Plus, she can surely squeeze out $12 million from somewhere to reach the milestone; a missing receipt somewhere perhaps.

Just keep remembering that Kylie's business is a multi-media powerhouse, directly accessed by 270 million motivated young shoppers, and not just a simple traditional retail cosmetics company. In any case, there are still some holes that will have to be cemented. While it may be difficult to estimate one's net worth, we can't help but admire those inspirational celebrities out there. And when it comes to making money at such a young age, Kylie Jenner is certainly the type of role model for an entrepreneur.

Check out some other articles on celeb$fortune related to celebrity's net worth. Updates will keep coming. Thanks.

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