Kris Jenner Builds a Billion-Dollar Beauty Empire - WWD

These days, Kris Jenner is thinking outside of the box.

Literally.

It’s just days after she has announced the end of “Keeping Up With the Kardashians,” the long-running reality TV show that propelled the Kardashian-Jenner clan to fame and unfathomable riches.

But after 14 years of small-screen superstardom, Jenner, the family matriarch and long credited as the mastermind behind the fantastical success of myriad spin-off businesses, is doubling down on the power of an even smaller screen, one that has also served her family well: The phone.

After all, why make fans wait for all that content when it’s possible to deliver it in real time?

“When we first started, there was no Instagram or Snapchat or other social media platforms,” said Jenner. “The world has changed. Now there are so many, the viewer doesn’t have to wait three or four months to see an episode. We can give them all of the information anyone would ever want to know in real time.

“Social media is the fastest and most controlled way to get the message out,” she continued. “The consumer gets to see the products the girls are working on in real time, and they know we’re going to get it out the door pretty quickly. The girls want them to be part of the journey to keep them engaged.”

“It didn’t happen overnight,” Hilfiger continued. “She allowed her business partners, in other words, her children, to be creative and develop brands and businesses that they were passionate about. It is now a multifaceted global entity with more opportunities in front of them than one would ever be able to imagine.”

Jenner has famously masterminded the enterprise as the ultimate ‘momager,’ (complete with a Kylie Cosmetics collection in 2018 of the same name, emblazoned with her most famous affirmations like, “You’re doing great, sweetie!,” made famous in season one during a Playboy photoshoot with Kim) yet staying largely behind the scenes when it comes to taking credit for the business success. But Jenner has become increasingly more forthcoming about her role in the strategic direction of the brands, and in April, Coty officially named her chief executive officer of Kylie Cosmetics, which it bought a 51 percent stake in for $600 million in 2019. Simona Cattaneo, president of luxury brands at Coty, oversees the operations side of the business.

While Jenner doesn’t have a business background, she has shrewdly steered the careers of her children and navigated the rocky terrain of deal making, benefiting both them and herself (she takes a 10 percent management fee of their earnings.)

“In the beginning, I would say yes to everything, then I realized how important it was to be strategic and selective and that was an evolution of our brand as a family and individually,” Jenner said. “We used to do a lot of licensing deals until I realized it was much more lucrative to have equity in a brand we were helping to build. The role we played in these brands became bigger than ever, and the power of that needed to be rewarded.”

Today, the portfolio encompasses eight brands: Kim Kardashian West has KKW Beauty, KKW Fragrance and Skims shapewear; Kylie Jenner has Kylie Cosmetics, Kylie Skin and Kendall + Kylie Clothing, a joint venture with her sister, Kendall Jenner; Khloe Kardashian has Good American, a line of inclusive-sized clothing she cofounded, and Kourtney Kardashian has Poosh, a wellness-oriented lifestyle e-commerce and content web site.

“Her business prowess is undeniable and it shows in every decision she makes,” said Dave Kimbell, president of Ulta Beauty, which sells both Kylie Cosmetics and KKW. “As it relates to brand building, she’s highly engaged and focused on leading the consumer in new, compelling ways. And, she has a powerful attention to detail which makes every element of the brands she builds truly reflective of her vision.”

That’s not to say it’s been easy. When asked what the most difficult business decision she’s made has been, Jenner’s response is swift. “They’re all hard,” she said. “When you’re building a brand, you have a different set of circumstances every day. Every day, there are fires to put out, a million different meetings and problems.

“It is about getting good at coping with that and the stress and enjoying the ride,” continued Jenner. “The decisions become not about how difficult the problem is, but how you handle the problem.”

By all accounts, Jenner excels at problem-solving. “She didn’t go to business school, but she has acumen,” said Peter Harf, the chairman of Coty who orchestrated the deals for Kylie Cosmetics and KKW.

“She is a true entrepreneur. She smells good business.”

Harf has put his money where his mouth is: In addition to the aforementioned Kylie deal, Coty paid $200 million for a 20 percent stake in KKW, a deal that valued the brand at $1 billion, and signed a licensing deal with Kardashian West to market a skin brand under her name.

“They own 49 percent of Kylie, but they control the business,” said Harf, “because if they don’t want to play anymore, this whole thing isn’t worth anything.”

Hilfiger, a mutual friend, first introduced Jenner to Harf, who said that he wasn’t attracted to the makeup side of the Kylie business, but rather in its potential as a global skin-care powerhouse.

Be that as it may, Wall Street is skeptical. “The market is still unresolved as to whether these were good deals for Coty,” said Stephanie Wissink, managing director at Jeffries. “It is still unclear how much of Kylie’s follower base is based on the entertainment side of the business versus the beauty brand.”

Harf himself has no such qualms, positing that both the Kylie and KKW businesses will be billion-dollar brands “much sooner than people think. The sky is the limit,” he said.

At the time of the deal, in November 2019, Coty reported that Kylie Beauty generated $177 million of revenue for the 12-month period, which it said was 40 percent growth relative to calendar year 2018. To Harf’s point, it was profitable growth the company reported, with an EBITDA of 25 percent.

Chief financial office Pierre-André Terrisse told analysts at the time that the return on investment would exceed the cost of capital by year three and that it will be accretive on earnings-per-share by 2021 and company insiders confirmed that it has.

“What do I love about this brand?” Harf asks, of Kylie Cosmetics. “She has 280 million followers—high awareness. It plays beautifully with young people between 14 and 30. Kylie plays extremely well in Asia—look at the skin.

“You don’t need a lot of advertising,” he continued. “They are talking directly to consumers and you get daily feedback on what you’re launching. You have to sell four times as much of other brands to make the same money.”

Still, skin care is a competitive category, one driven by performance, innovation and repeat purchases. Coty has had limited success in the category, with its Philosophy and Lancaster brands, and beefing up that area of the business is a key priority for recently named ceo Sue Nabi.

“I really would like this company to become a product-driven, product-centric, but also new business model-centric company,” she told analysts during a call in August. “If your product is not the best one on the market, if it’s not the one that delivers better than the others, if it’s not a product that’s perfectly designed for usage, but also for performance, and last but not least, if it’s not a product that you feel not guilty by using because it’s sustainable, then you’ll be happy to stick to this product.”

Nabi also spoke of the strength of the data analytics that Kylie Cosmetics and KKW bring to the table, and Jenner credits being able to capitalize on the feedback piece as one of the primary drivers of Kylie’s growth. At a time when many other brands were still learning the social media ropes, Jenner and her daughters were deploying data analytics and social media listening to stay ahead of the curve.

“The things we are working on are moving at a million miles an hour and my role is to manage it all at the same time,” said Jenner. “We are constantly listening, and having that information and takeaway of what our consumer wants means we can have great insight into what we want do next.”

But it’s also a two-way conversation. “The consumer is changing because they have more of a voice—it’s not just an empty purchase,” said Jenner. “They want a relationship and that makes it a give-and-take between the girls and the people who trust and follow them.”

Kris Jenner Maddie Cordoba/WWD

While much has been made of how lean the overall operation is, in terms of marketing, sales and research and development, Jenner has honed data analytics to continually keep the clan abreast of exactly what consumers want from them.

“Information moves so quickly and we need to be able to adjust and adapt,” she said. “There are so many of us, it gives us a beat to test new strategies like we never have before. It’s an opportunity to connect with consumers at a deeper level—we are always listening.”

Jenner isn’t the first to discover the power of social listening, but she was definitely early to the game. “It is a focus group in real time and that’s key,” she said. “People have been following our family for over a decade. They have watched the girls grow up. The girls have created a relationship. Kylie listens. Kim listens, and she is able to adjust and adapt accordingly. If something goes wrong, she is the first person to say, ‘I hear you. Let me change that, because you are absolutely right.’ The consumer loves that.”

The launch of a new category is one such example. When Kardashian West first announced her shapewear brand, it was named Kimono. The ensuing backlash over cultural appropriation was swift and loud, and she retrenched, changing the name to Skims.

Jenner herself said that the combination of trusting her intuition and listening is the secret sauce. “I don’t think you have to have all of the experience in the world,” she said, “but wisdom is really important. And it’s a learning experience along the way.”

Jenner has passed that lesson to her children. “She has really helped guide me and teach me,” said Kardashian West, “and helped shape my intuition on how I perceive different opportunities.”

She has also imparted her work ethic to her children. Ask anyone who knows her well, and they will invariably mention the sheer amount of work Jenner is able to get done in a day.

“Every summer when we were younger, she would wake us up at 7 a.m. on a weekend,” said Kardashian West. “She never wanted us to be lazy. It’s always seemed like there are more hours in the day for her than for anyone else.”

“She never stops,” said Anastasia Soare, the founder of Anastasia Beverly Hills and a close friend. “We were once training together at Gunnar Peterson, and even as she was on the treadmill, she was doing her business calls. If anyone can do business while they sleep, it’s probably Kris.”

“I thought I was a busy person,” Hilfiger said with a laugh. “Kris is on another level.”

Jenner stays organized by compartmentalizing each business. “I don’t do things at the same time,” she said. “I don’t commingle my meetings or the time I spend on each different business. They definitely have their own lanes. Otherwise I couldn’t stay organized.”

One key project over the last year has been masterminding Kylie’s international expansion. In May, the brand launched in Harrods and Selfridges in the U.K., and Douglas rolled out Kylie Skin to 25 countries in Europe. Kardashian West, too, is working on skin, with plans calling for a 2021 launch.

There is speculation that Jenner herself is working on a skin-care launch, too. “It’s a great idea—if you want to sell very expensive products to mature skin, who would be better?” said an industry source with ties to the family. “She looks fantastic—she looks like a million bucks.”

Jenner deflects such questions when they arise—“I think I’m a bit busy right now”—but doesn’t completely rule it out either. “I’ve always dreamed of having my own brand, so we’ll see,” she said. “I’m going to keep it to myself.”

No doubt, though, not for long.

Credits: Hair by Lea Journo; makeup by Etienne Ortega.

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