The $5B Question: Is Skims’ Culture-First Model the New Blueprint
Hey,
So Kim Kardashian’s Skims just raised $224 million at a $5 billion valuation
Six years old. On track to hit $1 billion in revenue this year. Worth more than brands that have been around for decades.
Meanwhile:
Spanx (founded 2000) sold majority stake at $1.2 billion valuation in 2021
Victoria’s Secret (founded 1977) currently valued around $4.5 billion but declining
Under Armour (founded 1996) struggling at $7 billion
Taking the above into account, is Skims the blueprint for how modern brands beat heritage players? Or is this just another overhyped celebrity brand that will crater when the hype cycle ends?
Let me show you what the numbers actually say because the answer changes everything about how consumer brands should be built in 2025.
The Numbers That Tell Two Different Stories
First, let’s look at what makes Skims extraordinary:
The Growth Trajectory:
April 2021: $1.6B valuation ($154M raised)
January 2022: $3.2B valuation ($240M raised)
July 2023: $4B valuation ($270M raised)
November 2025: $5B valuation ($224M raised)
That’s 3x growth in valuation in under 5 years.
After hitting an estimated $750M in revenue in 2023, the company is now officially targeting more than $1B in net sales for 2025.
But here’s what makes it fascinating, Kim Kardashian retains the largest ownership stake in Skims, with Forbes estimating her net worth at $1.7 billion, largely driven by her 35% stake in the company.
Compare that to heritage brands:
Victoria’s Secret:
Founded 1977 (48 years old)
Generated revenues of $6.8 billion in its 2021 financial year
Market cap around $4.5 billion (less than Skims!)
But declining: lost market share from 32% in 2015 to 21% currently
Spanx:
Founded 2000 (25 years old)
Sold majority stake to Blackstone at $1.2 billion valuation in 2021
Founder Sara Blakely no longer majority owner
Skims is worth MORE than Spanx despite being 19 years younger and doing less revenue. Victoria’s Secret does 7x Skims’ revenue but is only valued at similar levels.
What Skims Actually Figured Out
Let me break down the four strategic moves that explain Skims’ valuation:
1. Culture Over Category
Heritage lingerie brands positioned themselves in a category shapewear, lingerie, intimates.
Skims positioned itself in culture body positivity, inclusivity, modern femininity.
The difference:
Victoria’s Secret sold “sexy” through male-gaze fantasy (Angels, runway shows, push-up bras).
Spanx sold “solutions” through function (hide your flaws, look thinner).
Skims sold “confidence” through representation (all bodies, all skin tones, worn by real women including Kim herself).
Nearly 70% of Skims customers are millennials or Gen Z consumers demographics that Victoria’s Secret actively alienated with its “Perfect Body” campaigns and Spanx never connected with authentically.
When you own culture, category boundaries don’t constrain you. Skims started in shapewear, expanded to loungewear, then swimwear, then partnered with Nike for NikeSkims activewear that sold out within hours
Victoria’s Secret couldn’t expand beyond lingerie successfully. Skims can expand into anything that aligns with its cultural positioning.
2. Celebrity as Distribution, Not Just Marketing
Most heritage brands think of celebrity partnerships as marketing pay someone famous to endorse your product.
Skims flipped it: Kim Kardashian is the distribution channel. Kim Kardashian has 354 million followers on Instagram. That’s more reach than Victoria’s Secret ever had with their Fashion Show at its peak.
The economics are wild:
Heritage Brand Model:
Pay $15-40M for celebrity endorsement
Spend $70-130M on advertising to amplify
Hope it drives sales
Total marketing: 15-20% of revenue
Skims Model:
Kim posts wearing Skims (free)
354 million people see it immediately
Drives direct sales without paid media
Marketing spend: estimated 8-12% of revenue
That 8-10 percentage point margin advantage compounds. It’s why Skims can be profitable whilst growing 30-40% annually.
But here’s what’s clever: Skims recently hired Diarrha N’Diaye to be executive vice president of beauty and fragrance, signalling they’re expanding beyond Kim’s direct involvement. They’re building infrastructure to scale beyond celebrity dependence.
3. DTC-First, Omnichannel Second
Heritage brands built through wholesale department stores, specialty retailers, mall locations.
Then they tried to add DTC as an afterthought, competing with their own retail partners.
Skims did the opposite:
Phase 1 (2019-2022): DTC Foundation
Built direct customer relationships
Collected first-party data
Established brand on their terms
Proved product-market fit
Phase 2 (2022-2023): Strategic Wholesale
Skims underwear displayed at Nordstrom stores
Selective retail partnerships that enhance brand
Wholesale as customer acquisition, not primary channel
Phase 3 (2024-2025): Owned Retail
18 US stores currently operating, with plans for aggressive expansion using the new funding
Plans to accelerate brick-and-mortar and international expansion
Why this sequence matters. When you build DTC first, you own the customer relationship and data. Retail becomes a customer acquisition channel you control, not a partner who owns your distribution.
Victoria’s Secret is trapped by their mall-based retail model. Skims uses retail strategically to amplify a direct business.
4. Product Velocity Over Product Breadth
Heritage brands think in seasons Spring/Summer, Fall/Winter. Two major launches per year.
Skims thinks in drops.
Skims can afford top engineers to perfect fits for all bodies. Such investments cut development time by 30 percent. For context, Spanx took years to iterate shades. Skims compresses that into months.
The operational difference:
Heritage model:
Design 12-18 months ahead
Produce large quantities
Hope demand matches production
Heavy markdown risk if you’re wrong
Skims model:
Test products with small drops
Monitor real-time sales data
Reproduce winners quickly
Minimal markdown risk
This requires completely different supply chain: Fast fashion speed, luxury brand margins.
The NikeSkims collaboration launched earlier this year and sold out within hours, that’s testing demand with scarcity, then scaling what works.
Is This Actually Sustainable? (The Bear Case)
Now let’s talk about why Skims might be massively overvalued:
Problem #1: The Valuation Math Doesn’t Work
$5B valuation on $1B revenue = 5x revenue multiple.
For context:
Nike trades at 2.5x revenue
Lululemon trades at 4x revenue
Victoria’s Secret trades at 0.66x revenue
Skims is being valued like a high-growth tech company, not an apparel business.
To justify that valuation at a 20x EBITDA exit multiple, Skims needs to be doing $250M+ in EBITDA. At 25% EBITDA margin (very good for apparel), that requires... $1B in revenue.
So they’re priced for perfection TODAY. Any stumble and the valuation craters.
Problem #2: Kim IS the Moat
The company’s identity is tightly tied to Kardashian herself an undeniable asset, but a potential vulnerability if public perception shifts.
What happens when:
Kim gets older and less culturally relevant?
The Kardashian zeitgeist fades?
She has another business priority or scandal?
Heritage brands like Victoria’s Secret survived founder transitions. Can Skims?
Problem #3: The Competition Is Waking Up
Skims faces fierce pressure from giants like Lululemon and Alo Yoga, as the athleisure and “solutionswear” space becomes even more crowded.
Plus:
Rihanna’s Savage X Fenty (also celebrity-led, also inclusive)
Aerie (American Eagle’s intimates brand with body positivity messaging)
Amazon’s private label lingerie
Hundreds of DTC startups copying the playbook
First-mover advantage only lasts if you can build moats. What’s Skims’ defensible advantage in 5 years?
Problem #4: The Retail Gamble
Physical retail introduces heavy cost pressures, from staffing to logistics to real-estate commitments.
DTC brands expanding to retail is where many die:
Warby Parker: profitable online, struggling in stores
Casper: never figured out retail economics
Glossier: closed all stores, back to DTC-only
Opening 50-100 stores requires $100-200M in capital investment and fundamentally changes the business model. That’s what this $224M raise is funding and it’s the riskiest move Skims will make.
Problem #5: The Profitability Question
Skims is private, so we don’t know actual profitability. But let’s model it:
$1B revenue (2025 target) Gross margin: 60% ($600M gross profit)
Operating costs:
Marketing: 10% ($100M)
Technology/DTC operations: 8% ($80M)
G&A: 12% ($120M)
Retail operations: 5% ($50M)
Total operating costs: 35% ($350M)
EBITDA margin: 25% ($250M)
That’s actually excellent, IF the assumptions hold.
But for comparison:
Nike: 14% EBITDA margin
Lululemon: 24% EBITDA margin
Victoria’s Secret: 11% EBITDA margin
Skims would need to be as operationally excellent as Lululemon whilst growing 30%+ annually. Possible, but hard.
The New Blueprint: What Works (And What Doesn’t)
Based on Skims and comparing to other attempts, here’s what actually transfers:
What Works (The Replicable Parts):
1. Culture > Category Positioning
Don’t position in a product category. Position in a cultural movement.
Skims = body positivity/inclusivity
Liquid Death = anti-corporate rebellion
Patagonia = environmental activism
Allbirds = sustainable materials
When you own culture, category boundaries don’t constrain you.
2. Celebrity as Infrastructure, Not Marketing
If you have genuine distribution power (10M+ engaged followers in your category), use it as your go-to-market strategy, not your marketing boost.
But you need:
Authentic connection to the category
Daily involvement, not occasional posts
Willingness to be the face long-term
3. DTC Data Foundation
Build DTC to:
Own customer relationships
Collect first-party data
Test products quickly
Establish brand positioning
Then use wholesale and retail strategically to amplify.
4. Product Velocity
Fast fashion speed, premium brand margins.
Test with small drops, scale what works, minimise markdown risk through demand validation.
5. Investor Patience
The new capital infusion could further delay an IPO from Skims. By raising new private funding, Skims can continue to scale without immediate pressure to list.
This matters. Public markets force quarterly thinking. Private capital allows long-term building.
What Doesn’t Work (The Non-Replicable Parts):
1. You Can’t Fake 354 Million Followers
Kim Kardashian didn’t build Skims then get famous. She was already one of the most famous people on Earth.
Most founders don’t have that. Which means you need to build distribution differently (community, content, partnerships).
2. Celebrity Alone Isn’t Enough
Plenty of celebrities launch brands that fail:
Jessica Simpson’s fashion line: filed bankruptcy
Kanye’s clothing lines pre-Adidas: struggled
Most celebrity fragrances: dead within 3 years
Celebrity gets you attention, but doesn’t get you retention.
Skims works because the products actually solve problems and the brand positioning resonates. The celebrity opened the door the product kept people buying.
3. The Playbook Has a Window
First celebrity to do inclusive shapewear well: revolutionary.
Fifth celebrity to launch inclusive loungewear: derivative.
Skims worked partly because of timing. They caught the cultural wave of body positivity right when Victoria’s Secret was imploding over “Perfect Body” campaigns.
That specific opportunity doesn’t exist anymore.
The Real Question: Does This Model Beat Heritage Long-Term?
Here’s my take, based on the data:
In the short term (next 3-5 years): Yes, culture beats heritage.
Skims will likely:
Hit $2B+ revenue by 2027
Expand into beauty successfully (leveraging Kim’s credibility)
Open 50-100 retail stores
Either IPO at $7-10B valuation or get acquired by Nike/LVMH
Why? Because they have operational velocity that heritage brands can’t match, and cultural relevance that heritage brands lost.
In the medium term (5-10 years): It depends on operational execution.
The question becomes: Can Skims build the operational infrastructure to compete with Nike/Lululemon whilst maintaining the cultural cachet?
If yes: They become the Lululemon of intimates/loungewear a $10-20B brand with durable competitive advantages.
If no: They plateau around $2-3B revenue, stay profitable but slow-growing, eventually get acquired at 3-4x revenue.
In the long term (10+ years): Heritage probably wins but NEW heritage.
Skims IS becoming a heritage brand. They’re building the infrastructure, retail presence, and operational scale that creates durability.
20 years from now, Skims might be the Victoria’s Secret dominant but culturally stagnant, trying to figure out how to connect with Gen Beta whilst Gen Alpha launches the NEXT culture-first brand.
The cycle repeats: Insurgent brand disrupts heritage through culture → scales through operations → becomes heritage → gets disrupted by next insurgent.
The Verdict: Blueprint or Bubble?
So is Skims the new blueprint for consumer brands?
Yes with massive caveats. The blueprint that works:
Culture-first positioning
DTC foundation with first-party data
Celebrity/founder as distribution (if authentic)
Product velocity over breadth
Strategic omni-channel expansion
Patient private capital
The parts you can’t replicate:
354 million followers
Perfect timing on body positivity wave
Kardashian family ecosystem effects
Decade+ of brand building before Skims existed
My prediction:
Skims hits $2B revenue by 2027 and either:
IPOs at $8-12B valuation (if markets are hot)
Gets acquired by LVMH/Nike for $7-10B
Stays private and builds toward $3-4B revenue
But the $5B valuation today is pricing in PERFECT execution. Any stumble Kim scandal, product quality issues, retail expansion failure, competitive pressure and it reprices fast.
For other brands: The cultural playbook works. The celebrity shortcut doesn’t exist for most of us.
Build culture. Own distribution. Scale smartly. That part is real and replicable.
But don’t confuse “having 300 million followers” with strategy. That’s luck and legacy, not blueprint.
What cultural moment are you positioned to own?
Keep building,
David
P.S. Skims is worth $5B doing $1B revenue whilst Spanx sold at $1.2B doing similar revenue. The difference? Skims convinced investors it’s growing 40%/year forever. Spanx convinced them it peaked. In consumer, valuation is less about current performance and more about narrative of future performance. The question is: which narrative is actually true?