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Inside the Black Musical Capital
Kylie Jenner is refuting Forbes' claims that she lied about her finances. In a bombshell article, the outlet that in March 2019 dubbed the now 22-year-old makeup mogul the youngest self-made billionaire ever, claims that Kylie has lied about her earnings for years and alleges that she backed up the numbers with falsified tax returns. In a series of tweets, Kylie denied the outlet's claims.
"what am i even waking up to. i thought this was a reputable site.. all i see are a number of inaccurate statements and unproven assumptions lol," Kylie tweeted. "i’ve never asked for any title or tried to lie my way there EVER. period"
"but okay i am blessed beyond my years, i have a beautiful daughter, and a successful business and i’m doing perfectly fine," she wrote in another tweet, adding, "i can name a list of 100 things more important right now than fixating on how much money i have" and calling it the "LAST" thing she's worried about.
In a statement to ET, Kylie's attorney, Michael Kump, demanded Forbes retract their article.
"We have reviewed Forbes' article accusing Kylie of engaging in deceit and a 'web of lies' to inflate her net worth," the statement reads. "The article is filled with outright lies. 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 3 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."
Meanwhile, as a result of an investigation by Forbes, the publication claimed in their conclusion that Kylie is not a billionaire, and is more likely worth just under $900 million. That number includes the estimated $340 million in post-tax money Kylie got from selling the majority of her company, her revised company's earnings, and the value of her remaining Kylie Cosmetics share.
In the report, the outlet points to the paperwork from Kylie Cosmetics' 2019 sale to Coty as the proof that 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."
According to Forbes, about a year after Kylie launched her brand in 2015, her publicists began campaigning to get her to appear on the cover of the magazine, just like her sister, Kim Kardashian West, had in 2016. As part of that campaign, Forbes was shown tax returns that detailed $307 million in 2016 revenues and personal income of more than $110 million for Kylie that year.
While the outlet wrote that Kylie's tax returns were "likely forged," she tweeted, "you just THOUGHT they were forged? like actually what am i reading."
The outlet and the experts they approached, though, questioned the company's reported growth, which, if true, would have meant Kylie Cosmetics went from zero in sales to $300 million in sales in just one year. Forbes instead valued Kylie's worth at $41 million for its 2017 list, which put the reality star in the 59th spot.
According to the Jenners, in 2017, sales were up to $330 million, a number that one analyst told Forbes was "totally possible." Based on that number and the tax returns that appeared to back it up, Kylie covered the July 2018 of Forbes and came in at the 27th spot on its annual list, with a estimated worth of $900 million.
Then came the sale to Coty, which valued Kylie's company at $1.2 billion when it purchased 51 percent. That valuation, Forbes claims, left experts uncertain, largely because the past Kylie Cosmetics revenues they released as part of the sale were much less than Kylie had claimed.
According to the outlet, in a 2019 call with stock analysts, Coty said that Kylie Cosmetics brought in $177 million in the year prior, which, they said, was a growth of 40 percent. Those valuations didn't match up with the Jenner family's claims, which, at one point, valued Kylie Cosmetics at about double that.
Forbes speculated that the discrepancy could be due to Kylie's profits falling over one year, but experts found such a quick and drastic change unlikely. Rather, Forbes alleges that Kylie's business was always overvalued and suggests that the entrepreneur may have had her accountant provide falsified documents to back up her claims.
The outlet also claims that Kylie owns just 44.1 percent of her company, rather than 49 percent, citing the fact that, on Coty's purchase agreement, MJ 2018 Irrevocable Trust, which is controlled by Kristen M. Jenner, is listed as owning a profit interest in Kylie Cosmetics. While the Jenners claimed that the trust contains Kylie's own money, which she was unable to access before her 18th birthday, the outlet alleges that the trust wasn't formed until "well after" Kylie's milestone birthday.