Kim Kardashian transformed what started as a shapewear brand into a $1.6 bn multi-category business.
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1. The Kardashian drop model
Similar to other brands in Kardashian and her sisters' portfolio, SKIMS' product drop model mirrors that of the streetwear market. Hype is built on social media through aesthetically charged campaigns and a limited number of items are released, creating exclusivity and controlling demand. Collections achieving a viral or sold-out status are then replenished and expanded into new colorways or product types.
The Cozy Collection is evidence of this model's staggering success. According to Kardashian in an interview with WWD, the range "has been restocked 10 times" as it always sells out. SKIMS operates at a 32% sell out and 68% replenishment level - higher than other players in this space. Savage X Fenty and Aerie both have a 9% sell out rate, while LIVELY's in 16%. These brand's replenishment rates are 15%, 32% and 43%, respectively.
Images via Instagram - SKIMS
2. Minimal discounts & healthy margins
SKIMS' products are rarely reduced and when they are, it's via a private sale with a code emailed to customers. This year was its first public sale with 50% off everything over the Memorial Day weekend. Savage X Fenty operates a similar strategy, rewarding VIP members with steeper discounts. This differs from brands taking year-round markdowns, which can unnecessarily eat into margins. Since the start of 2021, the average discount depth online reached 41% at Victoria's Secret and 35% at Aerie.
Prices at SKIMS also sit higher than its competitors across almost all products. Bras are the exception as SAVAGE X Fenty records the highest price, justified through more intricate and structured lingerie. Consumers clearly aren't deterred by the cost, wanting to buy into the clout associated with SKIMS. This allows the brand to drive profitability and command stronger margins with fewer discounts and items selling out at a higher price point.
3. Size & shade inclusivity
The celebrity-founded brands built body diversity into their foundations and make a greater proportion of products available across sizes. While Victoria's Secret is overhauling its image, fewer styles are allocated to fringe sizes. Despite fewer SKIMS' products in 5XL than any other size, the brand has practically equal distribution between 2XS to 4XL. Inclusivity and longevity are also prioritized with a maternity range and the Fits Everybody collection, which boasts the ability to stretch up to four sizes, allowing consumers to wear throughout body changes.
Digital native brands Savage X Fenty and ThirdLove spotlighted the need for more diverse skin shades across the underwear market, offering a breadth of shades since their launch. SKIMS echoes this, stocking a variety of tones. Its bras and briefs are split by seasonal and core colors, with nine core hues available, including sand, ochre and cocoa. Diverse model imagery is championed across its social posts and campaigns. In the UK underwear market this year, Simply Be and Marks & Spencer released more inclusive ranges of skin colors to provide better consumer choice.
4. Swift category expansion
SKIMS is more than a shapewear brand. Despite its core focus on solutions-oriented garments, the label has forayed into multiple categories, spanning slippers, head wraps, bridal lingerie and sleepwear. This boosts its appeal to a wider target audience and captures market share from in-demand product areas and aesthetics. Underwear currently accounts for 48% of its category mix - this has decreased from 53% this time last year. Tops have grown in importance amid the loungewear and basics boom, rising from just 4% of 2020's assortment to 17% in 2021.
Last fall, the brand's launch into slippers illustrated how it has pivoted into winning categories, offering a faux fur slider in five colors that has witnessed several replenishments. Amid the surge in popularity for outdoors wear, SKIMS dropped an Outdoors Basics collection, tapping into the penchant for breathable styles and showcasing the versatility of core pieces. The brand further diversified its product portfolio by expanding into the kidswear market in November 2020 and offering mommy and me sets, appealing to the lucrative mini-me market.
Images via Instagram - SKIMS
5. Fabric diversification
Since launching in 2019, SKIMS has maintained buzz and interest through stocking a vast range of capsule collections centered around different fabrics. It has championed seamless silhouettes, propelling this aesthetic's popularity into the mainstream over the past year. SKIMS has succeeded throughout the pandemic by offering comfort-focused materials, including stretch ribbed and cotton collections. The brand tapped into consumers' thirst for nostalgia with its Y2K-inspired velour loungewear drop.
The brand's drop-down collections menu online showcases the breadth of fabric options available. These ranges are split by essentials, including cotton, stretch rib and seamless sculpt, and limited edition lines, such as velour, summer mesh and silk. This strategy helps to strengthen SKIMS' position as a basics yet trend-led label, and enhance its reputation as a lifestyle destination.
Images via Instagram - SKIMS
6. What's next?
During the height of the pandemic, shapewear arrivals decreased by 30% YoY, with the cancellation of events causing interest to wane. The number of styles selling out online fell 14% YoY. However, as consumers dress up once more, July shapewear sell outs in the US have experienced a triple-digit boost, positioning SKIMS' original products for further growth.
Kardashian has previously hinted at menswear products in an interview with WWD. Following Savage X Fenty's well-received foray into size-inclusive men's underwear, we can expect SKIMS future penetration of this market. The waters have previously been tested with a gender-neutral collection that achieved an 87% sell out rate, indicating demand is ripe.
Several SKIMS products already straddle swimwear, like the Jelly Sheer collection advertised for "poolside lounging." A traditional swimwear range could be on the horizon with images circulating of sister Kylie's upcoming swim collection combined with the history of the family's brand crossovers and Kardashian's penchant for bikinis.
Period pants have entered the mainstream with investment from Victoria's Secret PINK and Aerie, while adidas launched menstrual activewear. The market is expected to reach $495 mn by 2026, presenting itself as a lucrative and relevant opportunity for a diverse, female-founded brand like SKIMS.
Images via Instagram - SKIMS and Instagram - Kylie Swim
Contributions by Katharine Carter and Kayla Marci.
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