Kylie Jenner is not your average celebrity. The reality television star, who debuted on the hit Bravo series Keeping up With the Kardashians at just 10 years old back in 2007, has since launched her own cosmetics company--now said to be worth as much as $800 million.
That, coupled with a variety of brand endorsement deals over the years, brings the now 20-year-old's net worth to an eye-popping $900 million, according to a recent Forbes report.
"She has demonstrated a business acumen and business savvy to navigate this extremely, competitive world that we live in," says Jeremy Paul, president of the New York-based investment firm RLP Wealth Advisors, who works with similarly high net-worth individuals including athletes, celebrities, and entrepreneurs. "In the world of cosmetics, she found a niche and she was able to leverage her celebrity and her influence to grow that company at exponential speed," he adds.
To be sure, Jenner didn't accomplish this all on her own; it helped that she came from one of the most famous families in modern history. Her mother and "Kardashians" co-star Kris Jenner acts as her financier and marketing chief, taking a standard 10 percent of her sales; her siblings and fellow reality television moguls, meanwhile--which include Kim Kardashian West, fashion models Kendall Jenner and Khloé Kardashian, and designer Kourtney Kardashian--have occasionally helped to promote the nascent brand, pushing it out to their combined 347 million followers. Still, Jenner maintains complete ownership of the business, which has only seven full-time employees and five part-time workers, Forbes reports. And since 2016, she has generated a reported $330 million in annual sales. (Kylie Cosmetics did not immediately return Inc.'s request to verify these numbers.)
Jenner's success has a lot to do with her strategy on social media, where she posts daily--if not hourly--amassing more than 110 million followers on Instagram alone. And despite being a relatively new company--the line is just over two years old--Kylie Cosmetics tops the beauty industry in "impressions," a measure that includes likes, shares, and overall user engagement, according to analytics firm Shareablee. She raked in 324 million such actions during the past 12 months, eclipsing brands such as L'Oreal that surpass her in their total number of followers, the data found.
Still, Jenner insists that her business idea came from a common, if uncomfortable, human experience: a lack of confidence. Two years ago, as half-sisters Kim and Khloé began generating serious business through their own ventures--mobile gaming and fashion, respectively--Jenner was at a loss for what to do, recently telling the Evening Standard that she felt insecure about the size of her lips and turned to makeup as a solution. In the summer of 2014, she patented and trademarked the phrase "Kylie Lip Kits," and put $250,000 of her modeling earnings toward producing a limited-edition product line. When those sold out immediately, Kris helped her to ink a series of manufacturing and distribution deals with third parties, effectively turning a passion project into a bona fide business. By the end of 2016, her first year in business, the company had reportedly generated some $307 million, according to Forbes.
The best decision Jenner has made thus far, according to RLP's Paul, is outsourcing the lion's share of her operations to other entities. Unlike more traditional celebrity licensing deals, Jenner retains full ownership of Kylie Cosmetics--and the profits all go back to her. "Scaling through outsourcing and technology is a theme that has disrupted many industries, allowing companies to grow without large employee counts or brick and mortar space," Paul explains. "[Outsourcing] is a huge advantage to startups and allows them to compete at a rapid pace." Indeed, Jenner outsources her manufacturing and packaging to the Oxnard, California-based firm Seed Beauty; and lets e-commerce giant Shopify handle sales and logistics, Forbes found.
The Long Road Ahead
It may be difficult for Jenner to sustain the growth of Kylie Cosmetics over time. As with many fast-growing companies, including those that land on the annual Inc. 5000 list, her company saw revenue growth drop to only seven percent in 2017, despite adding more than a dozen new products (the Jenners insisted to Forbes that the sales growth is climbing in 2018.) Analysts say that the makeup maven may need to get creative in the future, especially if and when a new "it girl" comes onto the beauty scene, eclipsing her in popularity. "A lot of times, you have to realize that what got you to this point is not what is going to lead you to the next level of growth," suggests Paul. "Unless you have continued infrastructure and capital, the things that propel businesses to different levels can change."
Still, the Kardashians are nothing if not adept, and matriarch-cum-co-founder Kris has a proven ability to shift with the times. The seasoned mother and exec has pivoted from failed deals for everything from Silly Bandz to nail polish and a defunct QVC fashion line, as the New York Times previously reported, ultimately landing endorsements for her children from companies such as Chanel, PacSun and Steve Madden. As executive producer of the Kardashians show, she has helped the program grow to reach 1.4 million viewers, according to the most recently available data from Nielsen Ratings, after 14 seasons on the air.
Indeed, for the naysayers who insist that Kylie Jenner is simply one of those "famous for being famous" types--and there have been many sharing their skepticism this week alone--some point out that there is some strategy in parlaying fame into business. "Being given an opportunity and taking advantage of an opportunity are two different things," Paul tells Inc. "[Kylie] may have been provided one, but she has capitalized on it. I respect that."