Kardashian’s Skims Has a Global Plan That Starts in London

I was very inspired by the Jordan brand when Kim and I founded Skims.

I still am.

I bought my first pair of Jordan's when I was thirteen, and I'm still wearing Jordans most of the days. What Kim and I did was to build a brand inspired by her, not dependent on her. We tried to build a brand that is an active participant in popular culture.

I'm David Merritt and this is in the City, Bloomberg's podcast connecting you to the conversation's heart of the City of London. This week a conversation with YenS Greed, who is the co founder and chief executive officer of Skims if you haven't heard of it, that is Kim Kardashian's underwear and loungewear label, and with Franz scene Out. I asked our UK retail reporter Katie Lindsel to join the podcast and the conversation with Yen. I really did need your insight on the retail industry.

Casey I was very happy to help and a bit of a female touch as well. There we go discussed it was necessary, so.

You know, you might be forgiven for asking why a conversation with a Californian underwear seller in right. But I thought what was interesting about our conversation was what it told us about the state of retail around the world, but also here in Britain.

Right, Yeah, it's it's pretty exciting that they sound like they are really considering I mean, at least one London location. They've already did their toe into London with a self just pop up.

I found it.

Pretty interesting what he was saying about how London is really distinct when it comes to retail comparing with other locations because we have this sort of split between mass market and really high end luxury and do you want a bit more space that's sort of in between both. So it's going to be interesting to see where they choose as a location going forward. They sound like they are focusing here, so that's exciting.

Yeah, and some of the numbers of growth are pretty eye catching. So we talked to him about how sustainable that is, what are they doing in terms of fundraising, bacally going to go public at some point, and of course how did he end up working with one of the most famous people in the world, Kim Kardashian. Yance, Welcome to in the city. Thanks for joining us.

Thank you guys so much for having me. It's a pleasure.

I just thought i'd start with a big step back question. Really, I'd love to know a bit more about the origin story of SKIMS. You co founded it with one of the most famous people in the world, Kim Kardashian. How did you end up working with her, Where did the idea come from, and how did you end up in this role.

Like a lot of things in life, things happen organically over time, and it's hard to say exactly when we made the decision to start SKIMS. I had known Kim for quite a long time and we have been discussing doing something.

Together and playing with the idea.

She really had a vision of what she wanted a company to become and an aesthetic associated with it. She knew she wanted to reinvent the shape where categories specif and personally I felt there was a huge opportunity in underwear and lounge And somehow, over a couple of years, we just got to a point where we were doing it. But I don't really know when that moment was exactly. Sometimes you get so into a project that I think the project just makes the decision for.

You, and you're the chief executive of the company. Now, how involved or in the detail is Kim Kardashian.

Now, it's a true partnership and through I speak to her every day all the time. She is a phenomenal creative director. Having had almost a lifetime in fashion before Skims and having worked with some of the greatest from creatives to founders. I have to say she's unbelievably talented creative.

And of course Kim has such a huge following online and thus far Skims has really had an online story, right, and you have this huge following on social media. I think on Instagram you have something like five million followers. How key has social media been to your growth thus far?

I think social media plays a significant part of our story. Social media is where customers live and it's the facto our source of news and entertainment and connectivity today. So I would say it would be hard for any consumer facing brand to be successful today without being deeply rooted in the culture of social media.

Are there dangers that go along with that, but it has been disrupted massively over the last year. The trends in social media pretty hard to predict. How problematic is it to have so much of your business tied up with these social media platforms.

I don't know what the alternative to social media is today. One wouldn't try to build a brand through traditional linear TV. So while platforms sometimes comes and goes or goes up and down in popularity, behaviors generally tend to stick. None of us are on MySpace anymore, and my ninety six year old grandmother is a very avid user of Facebook. I'm not, but I'm a user of Instagram, but I

So is this some of the thinking behind now moving into bricks and watar stores? So there's quite a lot of excitement here with Skims opening stores. I think it's next year in New York and LA right, you're starting out in the US. Is that the feeling that you need to get your brand on the street in front of customers and really get shopping with them in real life? As some people put it.

I think the best brands are able to offer a mix. Eighty percent of purchases are still happening in physical stores. We have a brand that is undeniably very much in step with its time and its generation, and why would I miss out on eighty percent of our potential business?

Yeah, so here in London, how do you see the market for physical stores? Are you looking at? Obviously you've got a presence in salvages. Might we see a big flagship Skims store on Oxord Street, Origin Street?

Absolutely?

Absolutely, London is as a huge global city still relatively tricky with retail. The market's really polarized between real luxury and the true mass. So it's not a city where it's always obvious where brands to position themselves. It's also a city made up of villages with several high streets

So if you got your you mentioned the sort of village aspect of London. Have you got your in a particular village or a particular spot or is it too soon to say?

I think that's too soon to say.

How would generally phrase it is that I can absolutely see a future where Skims has stores in the most important cities, on the most important locations, and anywhere you might find an Apple store or a Nike store.

Is probably where we would like to have a Skim store.

And we've also seen that. I think it was in Paris that you've tested an international flagship. So do you have a number of stores in mind across Europe that you might be looking to open.

I don't have a fixed number. I think with physical stores, you've got to get into it. You've got to open, You've got to test and learn and find the formula that is perfect for you. I think if you visit an Apple store, a Nike store, or an out the store of a great brand for that matter, you'll see there's generations of store. It's a formula. It's not going to be perfect out of the gate. So we've got to give it some time and I'm sure we'll figure it out.

I'm just looking at the stats here about the number of stores' opening. You've got a pretty aggressive expansion plan, and that sales growth numbers are eye catching. But we all know, obviously the worrying economic headwinds that we talk about a lot on this podcast and on Bloomberg News. How competent are you that this is a great time to invest so much, to expand so much, and can we see these headline growth numbers really holding up?

I would say that the market might be slightly contracting and the consumer could be squeezed, but you have to really dive into the world of retail, and when you do, you'll find that retail is full of legacy players that are downtrending and downtrending slowly over a longer period of time, and have been You can still be incredibly successful in a contracting market if your brand is taking market share.

To take it all.

It's a huge polarization between those who are winning and those who are losing, and the middle ground seems to be very very soft, very very soft. And currently we're very grateful Schemes is one of the brands that are winning. We added over two million customers last year. We're hoping

Do you see ourselves as really having introduced that youngest generation to shapewear? Like when we think of it in our minds, the tradition of spanks and all this sort of thing. It's not sexy, it's not attractive. But in this occasion, are you really looking to get sort of the younger generation wearing shapewear potentially sort of day in, day out. It doesn't just have to be for a wedding or a really special occasion.

Absolutely.

Now, having said that, shapewear represents less than twenty percent of ourselves, and of course, over the last three years during the pandemic era, and shapewear was more or less non existent because it, to your point, was something that you war education friends' wedding, something like that. Now a lot of our shape or products are really bought and worn ass clothing, and a day doesn't go by when I walk through the city of London or New York or relay where I don't see people wearing skims out

I think, for example, now you have a valuation larger than Calvin Klein. Last year you did the fundraising round, and now the company's valued at north of three billion dollars. Do you think the timing could be right soon to list? Where do you stand on an IPO?

I'm not that old, but I'm old enough to know that if I could call the market, I'll be doing something else with my life. So I tend not to think so much about the timing. We have a great company. We have no urgence to be a public company. But I've said in other interviews. I think eventually Schems deserves to be a public company. I think it's a phenomenal brand, and we have nothing but opportunity in front of us.

So I believe we.

Have a tremendous amount of potential, and not just in Europe, but really across the world.

In terms of funding, you had a Series B funding round two hundred and forty million dollars in January of last year, led by long Pine capital. Is your funding situation currently secure for the foreseable? Do you have to do another round or is there nothing else on the horizon.

There's been some rumors that were out there talking to folks about another round, but nothing that I feel compelled to common to my DENI.

Okay.

And in terms of the role of the CEO, one of the things that we've been focusing on recently is how some of the challenges the CEOs can face. Simon Freakly Alex Partners was recently saying that now is tough is time to be a CEO because there's a lot of data, but it can be quite hard to actually get the insight. And CEOs are sort of expected to have a voice on everything, have an opinion on everything. Do you feel that pressure?

Yeah, I'm sure I do.

Right now, we're a private company, so I don't have to engage. But if we were to be a public company and if the board would want me to lead, then.

I am sure I will. But you know, pressure is a privilege.

As I say, I think one of the you know, going back to the social media point as well. With that, you know, CEOs are expected to have a voice on controversial topics. Too, whether it's issues around gender or around race. I mean, how much do you feel like you have to engage, particularly the brand that is so reliant on social media for engagement and for commerce.

I don't feel a need to engage in my as CEO, but I believe that our company naturally is in you know, it's a reflection of the team, and we have had a lot of questions about, you know, what was the thinking in terms of starting a truly inclusive and diverse brand, And for us, it was never something that we contemplated. It is a natural reflection of the team and the

What concerns you most about the future? You know, We've got obviously sticky inflation around the world, We've got economic headwinds. What really worries you about the future? Successive schemes, so many things.

I think I wake up every morning in a cold sweat about something, But that's my job.

I'm supposed to.

Inflation is certainly an issue. I would say that inflation, which is different in different places, is a big concern in terms of finding a way to deal with pricing internationally, so that's hard. We have not paused on the price increases we've seen to our customers. I would say over the last four years we've raised prices maybe one or two percent. So we have chosen instead to eat that and we've had the margins to do it. The world

So we're all on edge.

We're all been waiting and talking about the recession now for about eighteen months, every single day. Is it coming? Is it not coming. I've looked through two thousand and eight. I remember Sweden where I grew up in Stockholm in the early nineties and a banking crisis in the nineties in Sweden. I remember my parents' mortgage being eighteen percent fixed as a kid. So you know, I think we live in pretty good times.

And there's a real squeeze, particularly the UK on cost of living. It's a big story here. The Bank of England are having to step up their interest rate increases, and there's a feeling that maybe inflication is a bit stick in the UK and than other bits of the world. And Bloomberg Economics actually recently have predicted that the Bank of England is going to provoke a recession in the UK. Now, as you said, we debated about whether when a recession

I don't think recessions tend to be terminal events. If you take a step back, most people throughout the Great Recession of two thousand and eight went to work, saw their friends, had a party on a Friday night, and generally.

Got on with it.

It doesn't, of course, minimize a lot of their pain and suffering that happens on an individual level.

That's my belief.

When we talk about these matters, we tend to exaggerate just how bad it can get or how good it is. You know, the reality of life, it's somewhere between pretty good and pretty bad. But generally there's a lot of that has to happen for it to be truly catastrophic, and if it is well we're all done anyways. I remember how with Mark saying that he's the founder of oak Tree Capital in two thousand and eight or so,

You said you're focusing on creating great products. What's coming next or is there anything that you can point to the next twelve months which is going to kind of enrich that line? Any more progress for skims for men for instance, asking for a Friend.

We are launching men's for Skims in the fall of this year. Time and date to be confirmed, but it is coming, and just like any other category we launched, it tends to have been years in DEVELOPM. We wanted to do Swim out of the gate, but it took us three years to launch Swim much because we were trying to work out one or two things. A product that is truly differentiated from anything else in the market, and a product that gives the customer exceptional value for

You said you often walk down the street and you see people wearing skims. We're going to see lots of men walking around in as yet unrevealed skims outfits.

You'll be surprised.

Twenty percent of our traffic is from men, and twelve percent of our customers are currently male. So if you look at two hundred, hopefully two hundred and fifty million of side sessions this year alone, you're really talking about over fifty million of sessions being from men.

So our audience is there.

Which markets do you see it being particularly popular for men? I guess us is kind of the key one to start with. Where else you see being really popular?

Hopefully everywhere global brand after all? Which one I really do hope?

But I think as a guy, I think I've been underserved. I think I've paid a lot of money for a pretty poor product for most of my life that looks one way in the morning and looks a different way when I come home at night. So I think there's some room for improvement. It's a very discount lad market for men. It's not a quality lead market. I like to be the equality leadmarket.

Yes, thank you so much for joining us in the city.

Thank you guys so much for having me.

So I'm going to be buying some skims.

Yeah, there you go. That was good fun, wasn't it.

I should have asked him about what sort of what am I buying here? Underwear?

Yeah?

Boxes?

Yeah, Well clearly, Yeah, there's a there's a really big range to skims, more than i'd realized before.

This interesting exactly as I said, those numbers of growth, how sustainable ardor I mean, he hinted about the margins taking a squeeze, but this aggressive expansion plan and bricks and mortar, it's really noteworthy in the current climate, and you know whether or not the customers are going to be there with inflation so high, is for me pretty noteworthy.

Yeah, I guess that's what's to be seen, Right if she can have this sort of pull over generations and for years to come, that people can end up associating this brand so clearly with her that it's the key by as the Jordans were under Nikes.

Thanks for listening to this week's in the City. We will be back next week, but in the meantime, if you like our show, please head on over to Apple Podcasts or wherever you listen to podcasts and rate, review, and subscribe. This episode was hoted by me David Merritt alongside Katie Linsel It was produced by Somersadi, additional editing by Blake Maple's and special thanks to Yen's greed.