“Inside Kylie Jenner's web of lies” was the title that caught the world off guard. Two worlds, by the way – that of the most powerful digital influencers in the world and that of the cosmetics industry itself. After shining on the cover of the North American edition of Forbes in July 2018, the same magazine, an unquestionable authority in terms of success and wealth rankings, considered her the youngest billionaire with a fortune of her own. Title that ended up removing him last Friday.
"Kylie's business is significantly smaller and less profitable than the family has led the cosmetics industry and the press to believe for years," said Forbes, which less than a year ago hailed this early case of success. The publication accuses Jenner, now 22, of inflating Kylie Cosmetics revenues and extends the accusations to mother and businesswoman Kris Jenner, calling into question the veracity of some documents.
"No one is more concerned with accounting for the money they make than the family itself, which for years tried, with Forbes, to reach the top of our annual wealth lists," the magazine wrote. Now, the key to dismantling Kylie Jenner's apparent business success has come through Coty.
In November last year, this cosmetics giant, with revenues of 8.6 billion dollars, announced the purchase of a majority share of the brand created by the young businesswoman in 2015, 51% more precisely. The deal closed for $ 600 million, which automatically valued Kylie Cosmetics at around $ 1.2 billion.
Towards the top of the Forbes chart, fortune has never stopped increasing – valued at $ 800 million in 2017 and $ 900 million the following year, when the “Queen of Cosmetics” is declared on the cover of the magazine and rises to the 27th position in the list of the richest. In 2019, she would officially earn the title of billionaire.
"The truth came out in the small letters of the contract," he now referred to Forbes. “The suspicious actions Jenners were willing to take – including inviting Forbes to their mansions and the offices of their chartered accountant and even creating tax returns that were probably forged – reveal how desperate some super rich are to look. even richer ”, declared the publication.
A quick pass through the company's accounts, when the first lipsticks sold were sold – $ 400 million in revenue after the first 18 months of the deal. Through Kris Jenner's own hand, Forbes said it now had access to tax declarations worth US $ 307 million in 2016 alone, of which 110 million represented Kylie's personal gains. After confronting some analysts about the brand's savvy results, the magazine reached a much more realistic estimate and set Kylie Jenner's total earnings at $ 41 million that year. The figure left her in the 59th position of the richest, which would have frustrated the matriarch.
There have always been companies and analysts to legitimize the results. In 2018, annual revenues had risen to 400 million dollars and an Oppenheimer report even forecast 700 million revenues for 2020. But the records released by Coty in the meantime show quite different figures, namely the 177 million dollars in revenues referring to the 12 months prior to the purchase of half of the company, in November last year.
In the same presentation, Coty reported a 40% increase in sales compared to 2018, that is, in that year, the brand had generated 125 million dollars, well below the 360 million reported to Forbes. Another incongruity: the skin care line, launched in May 2019, would have grossed 100 million in the first month, but in fact it was about to close the year with 25 million in sales. Basically, the real numbers knocked all the figures previously reported by Kylie and her manager, Kris Jenner.
Some point to an abrupt drop in sales of Kylie Cosmetics between 2016 and 2018, exceeding 50%. Still, experts argue that such a promising business could never collapse so quickly. What Forbes points to as the most likely scenario is that the Jenners have lied about the numbers since 2016, even admitting that their accountant may have prepared tax returns with false numbers to inflate the young woman's net worth with claims to the billionaire. However, the publication has no way to certify that the documents displayed were false.
At the same time, Kylie has always been presented as the sole owner of the brand. However, the contract signed with Coty refers to a second person with a share in the brand's profits. After the sale, the document says that it would obtain part of the company's capital. Forbes assumes that the person in question is Kris Jenner. To be true, after having sold 51% of its brand to Coty, Kylie owns only 44.1% of Kylie Cosmetics and not 49%.
Kylie Jenner sells more than half of her cosmetic empire for 600 million
The conclusions are twofold: Coty paid too much for the portion of the deal and Kylie Jenner's net worth is now more difficult to calculate. Even so, Forbes carried out the calculations, already considering the effects of the Covid-19 pandemic. The final figure is under $ 900 million. It is more than enough to display the title of millionaire, but that of billionaire is out of the question.
Three days after the Forbes article scrutinizing the trapped accounts of the Jenner family, representatives of Kylie and Kris denied the businesspeople's suspicions of lying and falsifying results. On Twitter, Kylie dedicated some publications to the theme, as early as May 29, the date of publication of the article. “I thought this was a respectable site… All I see are inaccurate claims and unproven assumptions. I never asked for a title or lied to try to get there. Never", wrote. "This is literally the last thing I’m going to worry about now," shared that same day, finishing the subject on social networks.
With Kris Jenner, who has yet to speak publicly on the topic, conducting the accounts and business of the youngest daughter, the suspicions raised by the Forbes article may have caused some unease within the Kardashian-Jenner family. Based on statements by a source close to the family, the North American edition of The Sun reported that Kris would be evaluating the case with lawyers and that he would even have advised Kylie not to comment on the article on social media.
Meanwhile, the British edition focused the way the article reached the relationship between mother and daughter. “Furious”, Kylie reportedly stopped answering Kris Jenner's phone, at a time when the matriarch was working on managing the damage caused by the scandal. This scandal does not seem to have removed the financial interests surrounding the family. According to Reuters, after having closed a deal with the youngest of the sisters, Coty now searches for an eventual partner with Kim Kardashian.