ihanna might quickly want an even 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 client merchandise consulting agency Bluestock Advisors, says the premium valuation doubtless stems extra from Rihanna’s star energy than a confirmed observe report 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. “At this time, $3 billion seems rich because her items are not expensive, so she would have to do a lot of volume in lingerie, or around $140 million in Ebitda,” says Coyne.
But 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 help its first U.S. boutiques and abroad growth plans. To date, 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.)
Last 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 Beauty, 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 Young, CEO at Royalty Exchange says it’s affordable 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 the case, Rihanna’s stake within the firm can be price $990 million.
Savage X Fenty co-presidents Natalie Guzman and Christiane Pendarvis advised Forbes in January that the corporate has seen a income compound annual progress fee of 150% every year since its launch in 2018. Analysts say Rihanna’s fame isn’t all that’s fueling this progress. “Clearly there has been a pivot amongst the intimate industry where certain themes of empowerment and inclusivity are driving interest,” says Simeon Siegel, managing director at BMO Capital Markets. “This market has a compelling opportunity. We will see who best grabs it.”
There are loads of rivals within the intimate attire area. 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.
Meanwhile, 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 girls. The firm 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–however it received’t be simple: “She can take that top spot, but she will need a lot of volume to sell that much and a lot of distribution,” says Coyne. “An IPO can accelerate her retail and continue to cement her place.”
“With her pricing and branding, she’s creating an inclusive brand, that’s what she’s known for,” Coyne continues. “No one else is doing that across categories—other brands are trying to, but she did it first in a big way.”
Additional reporting by Lisette Voytko.