Speaker 1: I was very inspired by the Jordan brand when Kim
Speaker 1: and I founded Skims.
Speaker 2: I still am.
Speaker 1: I bought my first pair of Jordan's when I was thirteen,
Speaker 1: and I'm still wearing Jordans most of the days. What
Speaker 1: Kim and I did was to build a brand inspired
Speaker 1: by her, not dependent on her. We tried to build
Speaker 1: a brand that is an active participant in popular culture.
Speaker 3: I'm David Merritt and this is in the City, Bloomberg's
Speaker 3: podcast connecting you to the conversation's heart of the City
Speaker 3: of London. This week a conversation with YenS Greed, who
Speaker 3: is the co founder and chief executive officer of Skims
Speaker 3: if you haven't heard of it, that is Kim Kardashian's
Speaker 3: underwear and loungewear label, and with Franz scene Out. I
Speaker 3: asked our UK retail reporter Katie Lindsel to join the
Speaker 3: podcast and the conversation with Yen. I really did need
Speaker 3: your insight on the retail industry.
Speaker 4: Casey I was very happy to help and a bit
Speaker 4: of a female touch as well. There we go discussed
Speaker 4: it was necessary, so.
Speaker 3: You know, you might be forgiven for asking why a
Speaker 3: conversation with a Californian underwear seller in right. But I
Speaker 3: thought what was interesting about our conversation was what it
Speaker 3: told us about the state of retail around the world,
Speaker 3: but also here in Britain.
Speaker 4: Right, Yeah, it's it's pretty exciting that they sound like
Speaker 4: they are really considering I mean, at least one London location.
Speaker 4: They've already did their toe into London with a self
Speaker 4: just pop up.
Speaker 3: I found it.
Speaker 4: Pretty interesting what he was saying about how London is
Speaker 4: really distinct when it comes to retail comparing with other
Speaker 4: locations because we have this sort of split between mass
Speaker 4: market and really high end luxury and do you want
Speaker 4: a bit more space that's sort of in between both.
Speaker 4: So it's going to be interesting to see where they
Speaker 4: choose as a location going forward. They sound like they
Speaker 4: are focusing here, so that's exciting.
Speaker 3: Yeah, and some of the numbers of growth are pretty
Speaker 3: eye catching. So we talked to him about how sustainable
Speaker 3: that is, what are they doing in terms of fundraising,
Speaker 3: bacally going to go public at some point, and of
Speaker 3: course how did he end up working with one of
Speaker 3: the most famous people in the world, Kim Kardashian. Yance,
Speaker 3: Welcome to in the city. Thanks for joining us.
Speaker 2: Thank you guys so much for having me. It's a pleasure.
Speaker 3: I just thought i'd start with a big step back question. Really,
Speaker 3: I'd love to know a bit more about the origin
Speaker 3: story of SKIMS. You co founded it with one of
Speaker 3: the most famous people in the world, Kim Kardashian. How
Speaker 3: did you end up working with her, Where did the
Speaker 3: idea come from, and how did you end up in
Speaker 3: this role.
Speaker 1: Like a lot of things in life, things happen organically
Speaker 1: over time, and it's hard to say exactly when we
Speaker 1: made the decision to start SKIMS. I had known Kim
Speaker 1: for quite a long time and we have been discussing
Speaker 1: doing something.
Speaker 2: Together and playing with the idea.
Speaker 1: She really had a vision of what she wanted a
Speaker 1: company to become and an aesthetic associated with it. She
Speaker 1: knew she wanted to reinvent the shape where categories specif
Speaker 1: and personally I felt there was a huge opportunity in
Speaker 1: underwear and lounge And somehow, over a couple of years,
Speaker 1: we just got to a point where we were doing it.
Speaker 1: But I don't really know when that moment was exactly.
Speaker 1: Sometimes you get so into a project that I think
Speaker 1: the project just makes the decision for.
Speaker 3: You, and you're the chief executive of the company. Now,
Speaker 3: how involved or in the detail is Kim Kardashian.
Speaker 1: Now, it's a true partnership and through I speak to
Speaker 1: her every day all the time. She is a phenomenal
Speaker 1: creative director. Having had almost a lifetime in fashion before
Speaker 1: Skims and having worked with some of the greatest from
Speaker 1: creatives to founders. I have to say she's unbelievably talented creative.
Speaker 4: And of course Kim has such a huge following online
Speaker 4: and thus far Skims has really had an online story, right,
Speaker 4: and you have this huge following on social media. I
Speaker 4: think on Instagram you have something like five million followers.
Speaker 4: How key has social media been to your growth thus far?
Speaker 1: I think social media plays a significant part of our story.
Speaker 1: Social media is where customers live and it's the facto
Speaker 1: our source of news and entertainment and connectivity today. So
Speaker 1: I would say it would be hard for any consumer
Speaker 1: facing brand to be successful today without being deeply rooted
Speaker 1: in the culture of social media.
Speaker 3: Are there dangers that go along with that, but it
Speaker 3: has been disrupted massively over the last year. The trends
Speaker 3: in social media pretty hard to predict. How problematic is
Speaker 3: it to have so much of your business tied up
Speaker 3: with these social media platforms.
Speaker 1: I don't know what the alternative to social media is today.
Speaker 1: One wouldn't try to build a brand through traditional linear TV.
Speaker 1: So while platforms sometimes comes and goes or goes up
Speaker 1: and down in popularity, behaviors generally tend to stick. None
Speaker 1: of us are on MySpace anymore, and my ninety six
Speaker 1: year old grandmother is a very avid user of Facebook.
Speaker 1: I'm not, but I'm a user of Instagram, but I
Speaker 1: very much doubt my kids will be. So I think
Speaker 1: our behaviors tend to stick around, even though platforms might
Speaker 1: come and go.
Speaker 4: So is this some of the thinking behind now moving
Speaker 4: into bricks and watar stores? So there's quite a lot
Speaker 4: of excitement here with Skims opening stores. I think it's
Speaker 4: next year in New York and LA right, you're starting
Speaker 4: out in the US. Is that the feeling that you
Speaker 4: need to get your brand on the street in front
Speaker 4: of customers and really get shopping with them in real life?
Speaker 4: As some people put it.
Speaker 1: I think the best brands are able to offer a mix.
Speaker 1: Eighty percent of purchases are still happening in physical stores.
Speaker 1: We have a brand that is undeniably very much in
Speaker 1: step with its time and its generation, and why would
Speaker 1: I miss out on eighty percent of our potential business?
Speaker 3: Yeah, so here in London, how do you see the
Speaker 3: market for physical stores? Are you looking at? Obviously you've
Speaker 3: got a presence in salvages. Might we see a big
Speaker 3: flagship Skims store on Oxord Street, Origin Street?
Speaker 2: Absolutely?
Speaker 1: Absolutely, London is as a huge global city still relatively
Speaker 1: tricky with retail. The market's really polarized between real luxury
Speaker 1: and the true mass. So it's not a city where
Speaker 1: it's always obvious where brands to position themselves. It's also
Speaker 1: a city made up of villages with several high streets
Speaker 1: and their own particular culture and shopping habits. But absolutely
Speaker 1: London still is the best way to market to the
Speaker 1: rest of the world, and it's the natural entry point
Speaker 1: for an American consumer brand before it expands into Europe
Speaker 1: or the Middle East.
Speaker 3: So if you got your you mentioned the sort of
Speaker 3: village aspect of London. Have you got your in a
Speaker 3: particular village or a particular spot or is it too
Speaker 3: soon to say?
Speaker 2: I think that's too soon to say.
Speaker 1: How would generally phrase it is that I can absolutely
Speaker 1: see a future where Skims has stores in the most
Speaker 1: important cities, on the most important locations, and anywhere you
Speaker 1: might find an Apple store or a Nike store.
Speaker 2: Is probably where we would like to have a Skim store.
Speaker 4: And we've also seen that. I think it was in
Speaker 4: Paris that you've tested an international flagship. So do you
Speaker 4: have a number of stores in mind across Europe that
Speaker 4: you might be looking to open.
Speaker 1: I don't have a fixed number. I think with physical stores,
Speaker 1: you've got to get into it. You've got to open,
Speaker 1: You've got to test and learn and find the formula
Speaker 1: that is perfect for you. I think if you visit
Speaker 1: an Apple store, a Nike store, or an out the
Speaker 1: store of a great brand for that matter, you'll see
Speaker 1: there's generations of store. It's a formula. It's not going
Speaker 1: to be perfect out of the gate. So we've got
Speaker 1: to give it some time and I'm sure we'll figure
Speaker 1: it out.
Speaker 3: I'm just looking at the stats here about the number
Speaker 3: of stores' opening. You've got a pretty aggressive expansion plan,
Speaker 3: and that sales growth numbers are eye catching. But we
Speaker 3: all know, obviously the worrying economic headwinds that we talk
Speaker 3: about a lot on this podcast and on Bloomberg News.
Speaker 3: How competent are you that this is a great time
Speaker 3: to invest so much, to expand so much, and can
Speaker 3: we see these headline growth numbers really holding up?
Speaker 1: I would say that the market might be slightly contracting
Speaker 1: and the consumer could be squeezed, but you have to
Speaker 1: really dive into the world of retail, and when you do,
Speaker 1: you'll find that retail is full of legacy players that
Speaker 1: are downtrending and downtrending slowly over a longer period of time,
Speaker 1: and have been You can still be incredibly successful in
Speaker 1: a contracting market if your brand is taking market share.
Speaker 1: I just think we are in an environment today, doesn't
Speaker 1: matter if it is entertainment, restaurants, or fashion, where winners seem.
Speaker 2: To take it all.
Speaker 1: It's a huge polarization between those who are winning and
Speaker 1: those who are losing, and the middle ground seems to
Speaker 1: be very very soft, very very soft. And currently we're
Speaker 1: very grateful Schemes is one of the brands that are winning.
Speaker 1: We added over two million customers last year. We're hoping
Speaker 1: to add three million new customers this year. The brand
Speaker 1: has real momentum, not just in a specific custom group,
Speaker 1: but really across our biggest consumers are the millennials, but
Speaker 1: right behind it and it's gen Z and but gen
Speaker 1: X is also great. I mean, our dream was to
Speaker 1: have a brand that truly was cross generational. Much like
Speaker 1: I'm a Nike buff. I'm obsessed with Nike. And what's
Speaker 1: the great thing about Nike is that my son want
Speaker 1: to wear Nike. I want to wear Nike, and my
Speaker 1: mom can wear Nike. And I really hope over time
Speaker 1: that with Skins were able to build such a company.
Speaker 4: Do you see ourselves as really having introduced that youngest
Speaker 4: generation to shapewear? Like when we think of it in
Speaker 4: our minds, the tradition of spanks and all this sort
Speaker 4: of thing. It's not sexy, it's not attractive. But in
Speaker 4: this occasion, are you really looking to get sort of
Speaker 4: the younger generation wearing shapewear potentially sort of day in,
Speaker 4: day out. It doesn't just have to be for a
Speaker 4: wedding or a really special occasion.
Speaker 2: Absolutely.
Speaker 1: Now, having said that, shapewear represents less than twenty percent
Speaker 1: of ourselves, and of course, over the last three years
Speaker 1: during the pandemic era, and shapewear was more or less
Speaker 1: non existent because it, to your point, was something that
Speaker 1: you war education friends' wedding, something like that. Now a
Speaker 1: lot of our shape or products are really bought and
Speaker 1: worn ass clothing, and a day doesn't go by when
Speaker 1: I walk through the city of London or New York
Speaker 1: or relay where I don't see people wearing skims out
Speaker 1: and about. I kind of summed it up as Skims
Speaker 1: is an underwear and loungewear brand you wear when you're
Speaker 1: not lounging a lot of the times, just like lul Lemon.
Speaker 1: I guess it's a yoga brand you wear when you're
Speaker 1: not always doing yoga.
Speaker 4: I think, for example, now you have a valuation larger
Speaker 4: than Calvin Klein. Last year you did the fundraising round,
Speaker 4: and now the company's valued at north of three billion dollars.
Speaker 4: Do you think the timing could be right soon to list?
Speaker 4: Where do you stand on an IPO?
Speaker 1: I'm not that old, but I'm old enough to know
Speaker 1: that if I could call the market, I'll be doing
Speaker 1: something else with my life. So I tend not to
Speaker 1: think so much about the timing. We have a great company.
Speaker 1: We have no urgence to be a public company. But
Speaker 1: I've said in other interviews. I think eventually Schems deserves
Speaker 1: to be a public company. I think it's a phenomenal brand,
Speaker 1: and we have nothing but opportunity in front of us.
Speaker 1: And I think one of the things, going back to
Speaker 1: your questions about social what has happened over the last
Speaker 1: ten years, is that culture truly has become global. When
Speaker 1: something happens in Los Angeles or Studguard for that matter,
Speaker 1: everybody knows about it at the same time. So building
Speaker 1: a brand which really exists in popular culture like schemes,
Speaker 1: does you inadvertently or building a global brand from the start.
Speaker 1: We have over two hundred million site visits in the
Speaker 1: last over the last year or so, and over a
Speaker 1: third of that comes from outside of the US. Almost
Speaker 1: twenty percent of our business is done outside of the UNS,
Speaker 1: even though we are not offering currently an experience to
Speaker 1: rival even close to shopping experience or buying skims in
Speaker 1: the US.
Speaker 2: So I believe we.
Speaker 1: Have a tremendous amount of potential, and not just in Europe,
Speaker 1: but really across the world.
Speaker 3: In terms of funding, you had a Series B funding
Speaker 3: round two hundred and forty million dollars in January of
Speaker 3: last year, led by long Pine capital. Is your funding
Speaker 3: situation currently secure for the foreseable? Do you have to
Speaker 3: do another round or is there nothing else on the horizon.
Speaker 1: There's been some rumors that were out there talking to
Speaker 1: folks about another round, but nothing that I feel compelled
Speaker 1: to common to my DENI.
Speaker 2: Okay.
Speaker 4: And in terms of the role of the CEO, one
Speaker 4: of the things that we've been focusing on recently is
Speaker 4: how some of the challenges the CEOs can face. Simon
Speaker 4: Freakly Alex Partners was recently saying that now is tough
Speaker 4: is time to be a CEO because there's a lot
Speaker 4: of data, but it can be quite hard to actually
Speaker 4: get the insight. And CEOs are sort of expected to
Speaker 4: have a voice on everything, have an opinion on everything.
Speaker 4: Do you feel that pressure?
Speaker 2: Yeah, I'm sure I do.
Speaker 1: Right now, we're a private company, so I don't have
Speaker 1: to engage. But if we were to be a public
Speaker 1: company and if the board would want me to lead, then.
Speaker 2: I am sure I will. But you know, pressure is
Speaker 2: a privilege.
Speaker 3: As I say, I think one of the you know,
Speaker 3: going back to the social media point as well. With that,
Speaker 3: you know, CEOs are expected to have a voice on
Speaker 3: controversial topics. Too, whether it's issues around gender or around race.
Speaker 3: I mean, how much do you feel like you have
Speaker 3: to engage, particularly the brand that is so reliant on
Speaker 3: social media for engagement and for commerce.
Speaker 1: I don't feel a need to engage in my as CEO,
Speaker 1: but I believe that our company naturally is in you know,
Speaker 1: it's a reflection of the team, and we have had
Speaker 1: a lot of questions about, you know, what was the
Speaker 1: thinking in terms of starting a truly inclusive and diverse brand,
Speaker 1: And for us, it was never something that we contemplated.
Speaker 1: It is a natural reflection of the team and the
Speaker 1: generation that works within our business. It was our world
Speaker 1: and it reflects the world of popular culture, and it
Speaker 1: reflects the world in which we aspire to live in.
Speaker 1: So a lot of those questions, you know, are naturally
Speaker 1: answered by being in step with our times. We don't
Speaker 1: have to defend something.
Speaker 3: What concerns you most about the future? You know, We've
Speaker 3: got obviously sticky inflation around the world, We've got economic headwinds.
Speaker 3: What really worries you about the future? Successive schemes, so
Speaker 3: many things.
Speaker 1: I think I wake up every morning in a cold
Speaker 1: sweat about something, But that's my job.
Speaker 2: I'm supposed to.
Speaker 1: Inflation is certainly an issue. I would say that inflation,
Speaker 1: which is different in different places, is a big concern
Speaker 1: in terms of finding a way to deal with pricing internationally,
Speaker 1: so that's hard. We have not paused on the price
Speaker 1: increases we've seen to our customers. I would say over
Speaker 1: the last four years we've raised prices maybe one or
Speaker 1: two percent. So we have chosen instead to eat that
Speaker 1: and we've had the margins to do it. The world
Speaker 1: feels very unstable, but it's certainly not chaotic. It just
Speaker 1: feels very precarious.
Speaker 2: So we're all on edge.
Speaker 1: We're all been waiting and talking about the recession now
Speaker 1: for about eighteen months, every single day. Is it coming?
Speaker 1: Is it not coming. I've looked through two thousand and eight.
Speaker 1: I remember Sweden where I grew up in Stockholm in
Speaker 1: the early nineties and a banking crisis in the nineties
Speaker 1: in Sweden. I remember my parents' mortgage being eighteen percent
Speaker 1: fixed as a kid. So you know, I think we
Speaker 1: live in pretty good times.
Speaker 3: And there's a real squeeze, particularly the UK on cost
Speaker 3: of living. It's a big story here. The Bank of
Speaker 3: England are having to step up their interest rate increases,
Speaker 3: and there's a feeling that maybe inflication is a bit
Speaker 3: stick in the UK and than other bits of the world.
Speaker 3: And Bloomberg Economics actually recently have predicted that the Bank
Speaker 3: of England is going to provoke a recession in the UK. Now,
Speaker 3: as you said, we debated about whether when a recession
Speaker 3: is going to come in the US or not. If
Speaker 3: a recession does hit on a global level, how well
Speaker 3: positioned its skins to write that out.
Speaker 1: I don't think recessions tend to be terminal events. If
Speaker 1: you take a step back, most people throughout the Great
Speaker 1: Recession of two thousand and eight went to work, saw
Speaker 1: their friends, had a party on a Friday night, and generally.
Speaker 2: Got on with it.
Speaker 1: It doesn't, of course, minimize a lot of their pain
Speaker 1: and suffering that happens on an individual level.
Speaker 2: That's my belief.
Speaker 1: When we talk about these matters, we tend to exaggerate
Speaker 1: just how bad it can get or how good it is.
Speaker 1: You know, the reality of life, it's somewhere between pretty
Speaker 1: good and pretty bad. But generally there's a lot of
Speaker 1: that has to happen for it to be truly catastrophic,
Speaker 1: and if it is well we're all done anyways. I
Speaker 1: remember how with Mark saying that he's the founder of
Speaker 1: oak Tree Capital in two thousand and eight or so,
Speaker 1: and I'm recording it out of memory. Him and Bruce Couch,
Speaker 1: the other founder of oak Tree, was buying half a
Speaker 1: billion dollars a day, and they said, well, if we're
Speaker 1: not buying, we're not doing our jobs. And if the
Speaker 1: banking system collapses, well it doesn't matter anyway. So you know,
Speaker 1: I tend to mind my own house, my own brand,
Speaker 1: have a phenomenal product, entertain and engage with our community,
Speaker 1: and I cannot control, you know, the outside factors. What
Speaker 1: I can control is making sure I have a very
Speaker 1: strong balance sheet and we have a great margin, and
Speaker 1: that's what we do.
Speaker 3: You said you're focusing on creating great products. What's coming
Speaker 3: next or is there anything that you can point to
Speaker 3: the next twelve months which is going to kind of
Speaker 3: enrich that line? Any more progress for skims for men
Speaker 3: for instance, asking for a Friend.
Speaker 1: We are launching men's for Skims in the fall of
Speaker 1: this year. Time and date to be confirmed, but it
Speaker 1: is coming, and just like any other category we launched,
Speaker 1: it tends to have been years in DEVELOPM. We wanted
Speaker 1: to do Swim out of the gate, but it took
Speaker 1: us three years to launch Swim much because we were
Speaker 1: trying to work out one or two things. A product
Speaker 1: that is truly differentiated from anything else in the market,
Speaker 1: and a product that gives the customer exceptional value for
Speaker 1: the money day pay. So that's kind of how we
Speaker 1: have approached everything we do, and I think in the
Speaker 1: end of the day, behind the hype, it really comes
Speaker 1: down to product. I believe product is number one, is
Speaker 1: number two, and it's number three, and then comes everything else.
Speaker 1: You can get people excited, you can get people to
Speaker 1: try your product, but you cannot make people come back
Speaker 1: if your product isn't great.
Speaker 3: You said you often walk down the street and you
Speaker 3: see people wearing skims. We're going to see lots of
Speaker 3: men walking around in as yet unrevealed skims outfits.
Speaker 2: You'll be surprised.
Speaker 1: Twenty percent of our traffic is from men, and twelve
Speaker 1: percent of our customers are currently male. So if you
Speaker 1: look at two hundred, hopefully two hundred and fifty million
Speaker 1: of side sessions this year alone, you're really talking about
Speaker 1: over fifty million of sessions being from men.
Speaker 2: So our audience is there.
Speaker 4: Which markets do you see it being particularly popular for men?
Speaker 4: I guess us is kind of the key one to
Speaker 4: start with. Where else you see being really popular?
Speaker 2: Hopefully everywhere global brand after all? Which one I really
Speaker 2: do hope?
Speaker 1: But I think as a guy, I think I've been underserved.
Speaker 1: I think I've paid a lot of money for a
Speaker 1: pretty poor product for most of my life that looks
Speaker 1: one way in the morning and looks a different way
Speaker 1: when I come home at night. So I think there's
Speaker 1: some room for improvement. It's a very discount lad market
Speaker 1: for men. It's not a quality lead market. I like
Speaker 1: to be the equality leadmarket.
Speaker 3: Yes, thank you so much for joining us in the city.
Speaker 2: Thank you guys so much for having me.
Speaker 3: So I'm going to be buying some skims.
Speaker 4: Yeah, there you go. That was good fun, wasn't it.
Speaker 3: I should have asked him about what sort of what
Speaker 3: am I buying here? Underwear?
Speaker 4: Yeah?
Speaker 2: Boxes?
Speaker 4: Yeah, Well clearly, Yeah, there's a there's a really big
Speaker 4: range to skims, more than i'd realized before.
Speaker 3: This interesting exactly as I said, those numbers of growth,
Speaker 3: how sustainable ardor I mean, he hinted about the margins
Speaker 3: taking a squeeze, but this aggressive expansion plan and bricks
Speaker 3: and mortar, it's really noteworthy in the current climate, and
Speaker 3: you know whether or not the customers are going to
Speaker 3: be there with inflation so high, is for me pretty noteworthy.
Speaker 3: And I found it interesting how clearly he's tied this
Speaker 3: brand to one of the world's most famous celebrities, Kim Kardashian,
Speaker 3: and he talked about being a fan of his Jordan's
Speaker 3: trainers and this kind of cross generational appeal. And I
Speaker 3: guess the question is, can can Kardashian be the Michael
Speaker 3: Jordan for underwear? Right?
Speaker 4: Yeah, I guess that's what's to be seen, Right if
Speaker 4: she can have this sort of pull over generations and
Speaker 4: for years to come, that people can end up associating
Speaker 4: this brand so clearly with her that it's the key
Speaker 4: by as the Jordans were under Nikes.
Speaker 3: Thanks for listening to this week's in the City. We
Speaker 3: will be back next week, but in the meantime, if
Speaker 3: you like our show, please head on over to Apple
Speaker 3: Podcasts or wherever you listen to podcasts and rate, review,
Speaker 3: and subscribe. This episode was hoted by me David Merritt
Speaker 3: alongside Katie Linsel It was produced by Somersadi, additional editing
Speaker 3: by Blake Maple's and special thanks to Yen's greed.