For starters: “Filings released by publicly traded Coty over the past six months lay bare one of the family’s best-kept secrets: Kylie’s business is significantly smaller, and less profitable, than the family has spent years leading the cosmetics industry and media outlets, including Forbes, to believe.”
On the one hand, Forbes notes that this behavior isn’t particularly shocking from the family. But on the other, the lengths to which the family has gone to show that they are massively wealthy, “including inviting Forbes into their mansions and CPA’s offices, and even creating tax returns that were likely forged,” are telling.
Stephanie Wissink, an equity analyst covering consumer products at Jefferies, tells the magazine that this is part of the game the family plays. “It’s fair to say that everything the Kardashian-Jenner family does is oversized. To stay on-brand, it needs to be bigger than it is.”
Kylie’s company, Kylie Cosmetics, was launched after Kylie and her mother, Kris Jenner, decided that Kylie’s plastic surgery scandal from 2015 was the opportunity they needed to make more money. Which, fair: Many people have admired how the Kardashian-Jenner family has been able to turn events that could have doomed others intro lucrative business deals instead.
Kylie spent over a year denying that she used lip filler injections before she finally admitted the truth. After doing so, she used “$250,000 of her earnings from modeling, endorsements and Keeping Up With the Kardashians appearances” to launch her lip kit company. She sold out of every single $29 kit in under a minute.
Kylie’s older sister, Kim, appeared on the cover of Forbes the following year. Allegedly, “Jenner publicists began a campaign to ‘get a Forbes cover for Kylie.'” The team plied Forbes with details. “Revenues were $400 million over the business’ first 18 months,” the family apparently claimed, “with a personal take-home of $250 million for Kylie.” The family was even happy to open up their accounting books and prove it.
Forbes was “shown tax returns detailing $307 million in 2016 revenues and personal income of more than $110 million for Kylie that year,” which would have made Kylie the second person on the magazine’s Celebrity 100 list. But “the documents, despite looking authentic and bearing Kylie Jenner’s signature, weren’t exactly convincing since the story they told, of ecommerce brand Kylie Cosmetics growing from nothing to $300 million in sales in a single year, was hard to believe.”
Instead, the magazine consulted other analysts and came to a conclusion: Kylie Cosmetics had resulted in “$41 million in overall earnings for Kylie, good for the No. 59 spot. Kris was ‘so frustrated,’ the Jenners’ PR flack shot back. ‘We’ve done so much.'”
A few months later, a rival publication published the original numbers that Kylie tried to sell Forbes. “There has been raging speculation about the size of her business, with guesstimates ranging from $50 million up to $300 million. Well, here’s the bad news for more-established beauty players: Jenner’s surpassed the higher figure with ease. Kylie Cosmetics actually has done $420 million in retail sales — in just 18 months — Kris Jenner revealed … It was the first time the Jenners publicly disclosed the size of the business, the story boasted — ‘and they provided WWD with documentation.'”
Everyone started to change their tune, and by the following year Kylie was taken a lot more seriously. “Revenues were $400 million, according to a Piper Jaffray research note in 2018. An Oppenheimer report projected sales would top $700 million by 2020.”
And then Kylie got her Forbes cover. “Kylie appeared on the cover of Forbes magazine in July 2018, ranking 27th on our listing of the richest self-made women. At age 20, she was worth $900 million, we estimated, and would soon become the youngest self-made billionaire ever.”
Last year, Kylie sold her business for $600 million, which easily convinced most that she was definitely holding on to her billionaire status. But then, the numbers started to roll in, and they were less than stellar. In the year before the sale, Kylie Cosmetics had made $177 million. Still very impressive, but nowhere near estimates that were published. More importantly, “Coty said that sales were up 40% from 2018, meaning the business only generated about $125 million that year, nowhere near the $360 million the Jenners had led Forbes to believe.”
For Forbes, this meant that Kylie’s earlier numbers had to be fabrications, too. “If Kylie Cosmetics did $125 million in sales in 2018, how could it have done $307 million in 2016 (as the company’s supposed tax returns state) or $330 million in 2017?”
The conclusion? The Kardashian-Jenner family has probably been lying about Kylie’s income all along. “The business was never that big to begin with, and the Jenners have lied about it every year since 2016 — including having their accountant draft tax returns with false numbers — to help juice Forbes’ estimates of Kylie’s earnings and net worth. While we can’t prove that those documents were fake (though it’s likely), it’s clear that Kylie’s camp has been lying.”
Before you start feeling too bad for Kylie, her net worth is still valued at $900 million by Forbes, so she’ll be just fine. And as Forbes put it, “You have to remember they are in the entertainment business. Everything in entertainment has to be exaggerated to get attention.”