Kim Kardashian's clothing brand Skims, co-founded in 2019, has shown remarkable growth and potential in the business world, highlighted by its recent valuation of over $4 billion. The brand's success is further underscored by its latest fundraising round, which brought in $270 million, bringing the total funds raised to $670 million.
Wellington Management, renowned for assisting companies in going public, led the recent funding. This move, combined with the appointment of Andy Muir, a former Nike executive, as Skims' Chief Financial Officer, signals the possibility of an Initial Public Offering (IPO). The hiring of a CFO is often a precursor to a company preparing for an IPO, suggesting Skims might be on this trajectory.
Stock analysts view the potential IPO of Skims positively, partly due to Kim Kardashian's influential brand association. However, beyond the celebrity factor, analysts like Gurgavin Chandhoke from uINVST stress the importance of the company's strong fundamentals as a basis for potentially robust stock performance. Chandhoke points to an estimated net profit of $190 million in 2023, compared to current earnings, indicating substantial profitability growth. This growth trajectory is appealing to investors, particularly if it is seen as sustainable.
Additionally, the stock's current trading at 21 times its earnings is considered by some to be reasonable or even undervalued, depending on the industry benchmarks and the company's growth prospects. If Skims' industry counterparts are trading at higher multiples, it could indicate potential for stock appreciation.
As Skims potentially gears up for public trading, it represents an intriguing investment opportunity. However, as with any investment, it's vital for investors to conduct thorough research and consider the company's market positioning, financial health, and growth prospects before making investment decisions. Skims' entry into the public market could be a significant event, blending the worlds of celebrity branding and serious financial investment.