“Where did the money go?”: For which the youngest billionaire in the world with a scandal was stripped of the title
'06.06.2020'
Source: Lenta.ru report
The founder of the same name cosmetic brand Kylie Jenner with a scandal was stripped of the status of the youngest billionaire in the world, writes Lenta.ru.
Forbes suddenly stripped Kylie Jenner of being the youngest billionaire in the world. The allegedly real figures of the state of the 22-year-old businesswoman surfaced: the youngest sister from the Kardashian family was not as rich as the journalists thought over the past year. How did the famous family manage to hide the real income of the daughter’s company and splurge millions of fans?
Where did the billion go
In Forbes said that they had got the tax return of the cosmetic brand Kylie Cosmetics, dated 2016. The document stated that at that time the company’s profit was $ 307 million, and Kylie’s personal income was $ 110 million. This means that Jenner a priori could not top the list of "100 richest celebrities", according to the publication.
Industry experts had previously questioned Kylie Cosmetics' earnings: it was extremely difficult to believe that in just a year such a young girl managed to raise sales from zero to $ 300 million. The publication accused the celebrity of lying about the income of her company and forging tax returns to hold the title of the youngest billionaire in the world.
It is known that in January, Jenner sold half of her Kylie Cosmetics brand to the cosmetics giant Coty for $ 600 million and as a result of the transaction received approximately $ 340 million (after paying sales tax).
According to Forbes, the personal fortune of the 22-year-old entrepreneur currently stands at just under $ 900 million - this is clearly less than the billion announced on the cover of the magazine.
Jenner's fortune was restated taking into account the information of the buyer, Coty. It was also taken into account that the brand, like other cosmetics manufacturers, was affected by the impact of the COVID-19 pandemic and falling customer demand.
The reaction of the celebrity was not long in coming. On her Twitter account, Kylie Jenner criticized Forbes for posting “inaccurate allegations and unsubstantiated arguments” about her earnings. According to the girl, she never pursued the goal of obtaining any titles fraudulently.
On the subject: People donate money to Kylie Jenner so that she becomes the youngest female billionaire.
In addition, Jenner highlighted a quote from the Forbes material and drew the attention of fans to the fact that the author of the text only gives assumptions, and not specific facts. “Tax returns that were probably forged” - is this your proof? So you just took it and decided that they were forged? " - the former billionaire continued the controversy.
After that, Jenner tried to hide her indignation from the subscribers with a series of tweets about her indifference to the loss of title and the employment of “at least a hundred more important things.”
“I didn’t have time to refresh the page when everything was already sold clean”
The business of Kylie Jenner, like most enterprises of the Kardashian family, began with a scandal. The youngest sister fought off the annoying tabloids for a whole year, who were haunted by her suddenly enlarged lips. Tired of making excuses for her appearance, in May 2015, the girl nevertheless admitted that she pumped her lips with fillers (fillers for local injections, which are used in contour plastic (Note. - “Lenta.ru”).
However, the fact that she was caught in a lie did not upset Kylie. Having secured the support of Chris, an experienced mother in such matters, she decided to draw financial benefit from the attention of the public. By that time, the 21-year-old Jenner had already had 250 thousand dollars earned in the modeling and advertising business, as well as on the set of the show “The Kardashian Family”. This money served as the initial capital for the future beauty empire: in November of the same year, Kylie released 15 thousand cosmetic sets consisting of lipstick and eyeliner in tone.
On the subject: Sister Kim Kardashian Kylie Jenner showed her signature makeup in the 34 stage. VIDEO
Thanks to millions of followers on social networks, the 29-dollar sets scattered within the first minute after the start of sales. “I didn’t have time to refresh the page, when everything had already been completely sold out,” the young entrepreneur admired in an interview.
After a year and a half, Kylie Cosmetics' revenue amounted to more than $ 400 million, providing its owner with 250 million profit. All the figures in the tax returns that fell into the possession of Forbes were neatly recorded, under Jenner's detailed income statement for 2016, she had her personal signature.
According to Forbes, this was enough to give Kylie Jenner second place in the list of the richest stars in the world after singer Taylor Swift. But despite the fact that the documents looked authentic, social activists were still tormented by the paradox: how did an ordinary cosmetic company grow to such a scale in such a short time.
According to experts, for whom Kylie’s earnings data also seemed far from the truth, her real income in 2017 turned out to be ten times less and amounted to only 41 million dollars. With such numbers in the Forbes ranking of "100 Richest Celebrities", a business woman automatically slipped from second position to 59th. Chris Jenner was indignant: "But we tried so hard."
On the subject: 'The rich man's face' Kylie Jenner became the girls' favorite plastic
The Kardashian-Jenner family did not tolerate such humiliation. Soon a "sensational" article appeared in WWD, in which the young millionaire first revealed her allegedly real income. All the same figures were highlighted - 420 million dollars.
The news instantly scattered across social networks, information about the status of Kylie was reprinted by the largest media in the world, and by the summer of 2018, almost no one doubted the authenticity of the success of Kylie Cosmetics. Now, analysts not only assumed that such an amount was on the firm’s accounts, but also referred to the corresponding confirmations of “verified” sources close to the Jenner family.
Meanwhile, experts published new business valuations. According to the report of investment company Piper Sandler, that year the revenue of the cosmetic brand again amounted to $ 400 million, and two years later, Oppenheimer Bank concluded that its sales exceeded 700 million.
“Never in history has any influencer reached such heights, didn’t have such crazy fans, and such confidence that Kylie got in two and a half years,” commented the head of IT company Shopify, website developer Kylie Cosmetics.
The recognition of industry leaders helped Kylie Jenner halve the distance to the cherished goal: in July 2018, she climbed to 27th line in the Forbes rating. By the age of 20, the girl already had 900 million dollars in her account. Then the publication suggested that it was separated for some 12 months from the title of the youngest billionaire in the world, who had earned her fortune on her own.
Kylie Jenner celebrates her 21st birthday at Elite Los Angeles nightclub Delilah. The whole space is decorated in a pink Barbie style, on stage for her are rapper Travis Scott and standup Dave Chappell. On black t-shirts of bartenders there is a print in the form of a photo of the birthday girl on the cover of Forbes magazine, as well as the caption: “US billionaires
Not a billion baby
Doubts that Jenner was once a billionaire at all appeared at Forbes at the end of 2019, when a business woman sold 51 percent of Koty's Cosmetics to Coty for $ 600 million, and her fortune reached $ 1,2 billion. .
The agreement played into the hands of not only Jenner, who with his help received a huge amount of money and confirmed her status as a billionaire. It also helped Coty, a long-forgotten company, once again be heard by consumers, especially fans of the Kylie Cosmetics brand. Immediately after the conclusion of the agreement, Coty CFO announced that "now the company will become a more modern and profitable player in the field of beauty."
Despite this, exchange analysts reacted to the deal with skepticism. They felt that Coty paid too much for a brand that could simply go out of style after a while. In addition, experts were alarmed by Coty's belief that Jenner would continue to advertise Kylie Cosmetics after its sale. Doubts entailed a series of checks: experts decided to recalculate the revenue of the Kylie brand over the past year.
The total amount was 125 million dollars, not 360, as the billionaire previously stated. Information about the income that the line of skin care products brought to business in May 2019 also turned out to be unreliable. It turned out that the amount received was not 100 declared millions of dollars, but 25. Moreover, they sold cosmetics for a whole year, and not a month and a half, as Jenner representatives claimed. Kylie herself now does not own 49 percent of the company’s shares, but only 44: the rest is owned by her mother Chris, who was originally the confidant of the brand’s creator.
“The calculations showed that the company's turnover was much lower than everyone expected,” said Stephanie Wissink, financial analyst at investment bank Jefferies.
According to official tax documents, in 2018, Kylie Cosmetics sales amounted to $ 125 million, and in 2017 and 2016 - $ 330 and 307 million, respectively. It turns out that the company's revenue for half a year has decreased by half, and Coty bought a “fast-growing” brand, whose profit actually only declined all these years.
However, experts interviewed by Forbes believe that Jenner's business could not collapse so sharply. “It is unlikely that such a big income could evaporate in just one night,” said Omar Saad, an analyst at Evercore Bank. In this regard, journalists concluded: most likely, Kylie Cosmetics never had such a large income, and the owner of the company and her immediate environment all this time provided the media with false data.
