In the last 10+ years, each member of the Kardashian-Jenner clan has participated in their fair share of controversy. And the youngest, Kylie Jenner, is no exception. However, the subject of her latest scandal is a bit unique: Forbes recently revoked the billionaire status they bestowed upon her in 2019. We’ll explore why they did and what the fallout of the Kylie Jenner billionaire debacle may mean for her, the cosmetics industry, and entrepreneurs such as yourself.
The Kylie Jenner Billionaire Status Backstory
In March of 2019, Forbes declared that Jenner, then 21, was “the youngest self-made billionaire ever.”
Using numbers provided by Jenner and her mother, Kris, the money-focused magazine assigned Jenner’s company, Kylie Cosmetics, a value of at least $900 million that year. And after adding in money Jenner had already made, Forbes’ estimate of her fortune was $1 billion.
Jenner had reached a truly historic financial milestone. Or so Forbes believed.
How to Fake a Billion
Until May of this year, in which Forbes walked back their claim. In their exposé, Forbes accuses Kris and Kylie of stringing them along with forged tax returns and falsified revenue figures.
The magazine explains that, in 2017, financial and beauty analysts alike were skeptical of how much money the Jenner’s claimed Kylie Cosmetics was raking in.
But then, later that year, WWD swore Kris Jenner had the receipts for the $420 million in retail sales her daughter’s lip kits had secured in the first 18 months since the company launched in 2015. Furthermore, the Jenners told Forbes that Kylie Cosmetics’ 2017 revenues had increased 7% to $330 million. With this information, Forbes predicted Jenner’s personal wealth would reach the billion-dollar mark soon enough.
A few months later, Forbes officially awarded Jenner the much-coveted financial title. But in November 2019, aged cosmetics company Coty announced its plan to purchase 51% of Kylie Cosmetics for $600 million. This move effectively valued Kylie’s business at $1.2 billion.
And suddenly, the analysts were suspicious again, fearing that Coty had overestimated another trending celebrity brand. And Coty’s numbers for the Jenner company failed to assuage these fears.
Kylie Jenner Billionaire Branding Gone Wrong
Coty revealed that Kylie Cosmetics made just $177 million in the last 12 months and only $125 million in 2018. These figures exposed a much smaller venture than the Jenners originally alleged.
Coty’s presentation taught Forbes that “Kylie’s profits are likely lower than we figured.” The magazine also learned that Kylie owned a smaller percentage of the company than Forbes had originally deduced. Consequently, Forbes concluded that Kylie Cosmetics was “never that big to begin with.”
In the end, after admitting they’d been had, Forbes took the cash crown back from Kylie and accused the Jenner camp of lying. They also lowered their estimate of Kylie’s wealth to just under $900 million.
So, how might this salary saga impact Kylie, the beauty industry, and small business owners everywhere? Let’s discuss.
Possible Branding Problems for Ex-Billionaire Kylie Jenner
Jenner named her company after herself. And now, due to the fact that she lied publicly (about her company, no less), she has associated her brand with lies.
Jenner’s representatives wrote Forbes to say the accusations against Kylie and co. were false. Additionally, Jenner tweeted that the article featured “a number of inaccurate statements and unproven assumptions.” She also denied lying “EVER.”
But by this time, too many random revenue numbers were floating around for her brand to remain trustworthy. What’s more, Forbes reveals that Jenner’s publicists pushed a campaign to “get a Forbes cover for Kylie.” This campaign was a direct response to Kylie’s half-sister Kim’s 2016 cover. That reality waters Jenner’s run for the billionaire ranking down to a petty little act, which also casts a bad light on her brand.
Maybe the backlash will negatively affect the bottom line of Kylie Jenner, billionaire wannabe, or maybe it won’t. But Jenner runs the risk of her customers with a conscience cutting off their funding, which would only be fair.
Unwelcome Branding Woes for Rising Beauty Brands
With over 180 brands in existence, the beauty market is saturated. And with social media demanding corporate transparency, these companies feel pressured to raise their standards on issues like toxic chemicals and animal testing to stay relevant.
As soon as they sense any amount of duplicity, disgruntled customers quickly call cosmetics companies out with disparaging comments. And as Kylie Cosmetics told a pretty tall tale, social media influencers and users might become even more suspect of beauty brands’ statements about ethical practices or promises to be more inclusive.
So, cosmetics companies that speak positively about their progress may struggle even more to convince customers. And due to the plethora of makeup products available, customers won’t be hurting if they take their business elsewhere. But the company they spurned will.
A Bad Branding Strategy for Entrepreneurs and Small Businesses
We can’t all have our names on magazine covers. But if we represent a company or own a small business, our names are still very important to our profitability.
The reason being, people will always link our reputations to our names. And once we attach our names to our means of income, people will affix our reputations to our businesses as well.
As a result, if we employ dishonesty and deceit in our private lives, our potential customers will assume we do the same in our professional lives. And for many of them, our disreputable character will be reason enough to reject our services.
Better Branding Advice for Free
Basically, you are your brand. What’s more, earning your customers’ money means winning their trust. Therefore, promoting your brand with lies is bound to backfire. The reason being, it forces people to question everything about you and your company.
One better way to ensure the success of your business is to be decent in your downtime. Another is to get expert help for your image management.
At Kamisol Style Consultancy, we provide professional branding services that can help you elevate your brand no matter what level it’s at. And with our complimentary consultations, you can start the process of improving your brand now so that it doesn’t deter your dreams later. So, learn more about our free consultations today!