MAGIC  Convention August 2019- Day 2 - Las Vegas

On Friday, Forbes dropped an incredible bombshell: Kylie Jenner is not a billionaire. Not only that, but Forbes had the RECEIPTS on how the Kardashian-Jenners falsified tax returns and business records to hype Kylie Cosmetics for years ahead of KC’s sale to Coty last year. Forbes originally declared Kylie to be a billionaire last year, when Coty purchased 51% of the company for $600 million, meaning that KC was valued at the time at $1.2 billion. Plus, before Coty’s purchase, it was widely assumed – especially given the data provided by the Kardashian-Jenners – that Kylie, as sole owner of KC, had been raking in tens of millions in profit for years because of her overpriced lip kits. Now Forbes says that Kylie has been completely misrepresenting the size of her business, the profit from KC and the sales figures in general for years. You can read the full Forbes piece here. Here’s just a chunk:

But in the [Coty] deal’s fine print, a less flattering truth emerged. 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.

Of course, white lies, omissions and outright fabrications are to be expected from the family that perfected—then monetized—the concept of “famous for being famous.” But, similar to Donald Trump’s decades-long obsession with his net worth, the unusual lengths to which the Jenners have been willing to go—including inviting Forbes into their mansions and CPA’s offices, and even creating tax returns that were likely forged—reveals just how desperate some of the ultra-rich are to look even richer.

Based on this new information—plus the impact of Covid-19 on beauty stocks and consumer spending—Forbes now thinks that Kylie Jenner, even after pocketing an estimated $340 million after taxes from the sale, is not a billionaire.

[After the Coty deal was made], there were Kylie’s financials. Revenues over a 12-month period preceding the deal: $177 million, according to the Coty presentation—far lower than the published estimates at the time. More problematic, 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. Kylie’s skin care line, which launched in May 2019, did $100 million in revenues in its first month and a half, Kylie’s reps told us. The filings show the line was actually “on track” to finish the year with just $25 million in sales.

“I think everybody was surprised,” says Wissink, the Jefferies analyst, who was on the call. “The negative that came out of that announcement was that the business was a lot smaller than everybody had expected.” So much smaller, in fact, that there’s virtually no way the numbers the Jenners were peddling in earlier years could be true either. 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 more likely explanation: 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.

[From Forbes]

Personally, I think it’s idiotic to go to these lengths – if Forbes is correct in their analysis – just to hype the hell out of a profitable, successful business to the point where they’re forging documents. It’s not like the Jenners were actually hiding corporate malfeasance or losses – they were forging documentation so that Forbes would say Kylie was a billionaire. Kylie Cosmetics was actually a successful business and Kylie was raking in millions of dollars of profit, but she just wanted KC to look like it was twice as profitable as it actually was. Of course, all of that hype also helped Kylie sell a controlling stake in KC in a deal which is looking more and more like a poor investment, or simply an overpriced investment.

Still, the thing is… Kylie is still rich as hell. Forbes says that using the new data and assumptions from Coty, they figure that Kylie is worth “just under $900 million.” For the love of God. They also say that, of course, the business is down because of the pandemic and that’s affecting all of their predictors too.

Anyway, Kylie and Kris Jenner are reportedly “freaking out” and their lawyer dropped this:

“We have reviewed Forbes’ article accusing Kylie of engaging in deceit and a ‘web of lies’ to inflate her net worth. The article is filled with outright lies,” the lawyer, Michael Kump, said in a statement to The Post on Friday. “Forbes’ accusation that Kylie and her accountants ‘forged tax returns’ is unequivocally false and we are demanding that Forbes immediately and publicly retract that and other statements. It is sad that, of all things, Forbes has devoted three reporters to investigate the effect of the coronavirus crisis on Kylie’s net worth. We would not expect that from a supermarket tabloid, much less from Forbes.”

Forbes said it stands by its story. “Today’s extensively-reported investigation was triggered by newly-filed documents that revealed glaring discrepancies between information privately supplied to journalists and information publicly supplied to shareholders,” said Forbes spokesman Matthew Hutchison. “Our reporters spotted the inaccuracies and spent months uncovering the facts.”

[From Page Six]

I don’t know, I believe Forbes. I think Forbes’ original billionaire claims had some educated-guesswork, and so does this new report. It sounds like the Forbes reporters were genuinely shocked by Coty’s filings and they just decided to dig deeper. Kylie also had to tweet something. Again, we’re talking about the difference between “Kylie is worth $1.2 billion” versus “Kylie is worth $900 million.” At some point, it’s really f–king tacky to complain about this sh-t.

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Photos courtesy of WENN, Avalon Red, Backgrid and Forbes.
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