The Silk Street: Already a billionaire due to her magnificence firm, Rihanna is now contemplating taking her lingerie firm public.
(Photograph by Kevin Mazur/Getty Photographs for Savage X Fenty)
R
ihanna might quickly want a much bigger umbrella.
On Thursday, Bloomberg reported that the 34-year-old singer-turned-billionaire entrepreneur is working with Morgan Stanley and Goldman Sachs on an preliminary public providing of her lingerie model, Savage X Fenty. The IPO, which might occur as early as this yr, might worth Rihanna’s body-inclusive firm at greater than $3 billion.
Shannon Coyne, cofounder of shopper merchandise consulting agency Bluestock Advisors, says the premium valuation doubtless stems extra from Rihanna’s star energy than a confirmed observe document of gross sales. She factors to the truth that the Savage X Fenty model is lower than 5 years previous and has only a handful of brick-and-mortar shops in operation. “Right now, $3 billion appears wealthy as a result of her gadgets usually are not costly, so she must do plenty of quantity in lingerie, or round $140 million in EBITDA,” says Coyne.
However the model does have momentum. Savage X Fenty started the yr by asserting a brand new funding spherical of $125 million led by Neuberger Berman to assist its first U.S. boutiques and abroad enlargement plans. So far, the El Segundo, California-based firm has raised $310 million in funding. (Forbes reached out to Savage X Fenty, in addition to L Catterton for interviews. Neuberger Berman declined to remark.)
Final yr, Rihanna formally joined the ranks of billionaires when Forbes estimated her web price at $1.7 billion, a majority of her wealth coming from her cosmetics firm, Fenty Magnificence, price about $1.4 billion.
Rihanna holds an estimated 30% stake within the Savage X Fenty lingerie model, which is price an estimated $270 million.
Gary Younger, CEO at Royalty Change says it’s cheap to imagine her 30% stake will switch to 30% fairness within the firm if it does IPO at a $3 billion valuation. If that is so, Rihanna’s stake within the firm can be price $990 million.
Learn Extra: Rihanna’s Savage X Fenty Lingerie Model Raises $125 Million, Opens Its First Retailer
Savage X Fenty co-presidents Natalie Guzman and Christiane Pendarvis instructed Forbes in January that the corporate has seen a income compound annual progress charge of 150% every year since its launch in 2018. Analysts say Rihanna’s fame isn’t all that’s fueling this progress. “Clearly there was a pivot amongst the intimate trade the place sure themes of empowerment and inclusivity are driving curiosity,” says Simeon Siegel, managing director at BMO Capital Markets. “This market has a compelling alternative. We’ll see who finest grabs it.”
There are many rivals within the intimate attire house. Startups like ThirdLove, Parade and CUUP have already established themselves as leaders within the bra class. And SKIMS, the shapewear firm cofounded by Kim Kardashian, raised $240 million in January, reaching a valuation of $3.2 billion.
In the meantime, Victoria’s Secret, which controls 40% of the lingerie class, is within the midst of a rebrand to clip its notorious angel picture and cater to actual ladies. The corporate exceeded progress expectations for the fourth quarter of 2021, up 3.6% year-over-year.
Coyne provides that going public might be what Rihanna’s Savage model must beat Victoria’s Secret’s–but it surely received’t be simple: “She will be able to take that high spot however she is going to want plenty of quantity to promote that a lot and plenty of distribution,” says Coyne. “An IPO can speed up her retail and proceed to cement her place.”
“Together with her pricing and branding, she’s creating an inclusive model, that’s what she’s recognized for,” Coyne continues. “Nobody else is doing that throughout classes, different manufacturers try to however she did it first in a giant method.”
—Extra reporting by Lisette Voytko.