Forbes Calls Out Kylie Jenner For Lying About Billionaire Status With Forged Tax Returns; Jenner Responds

The Kardashian-Jenner Klan are known for their tenacity to get to the money. Even if the sound of their name makes you roll your eyes and cringe, critics must admit that it’s intriguing how the family has managed to keep their names on top of the rich and famous lists for over a decade.

The Kardashian-Jenner machine-and the cash it generates has been the subject of articles, podcasts, even books, Forbes reports. But no one cares more about the topic of money than the family itself, which has, according to Forbes, spent years fighting Forbes for higher spots on their annual wealth and celebrity earnings lists.

Kylie Jenner, 22, was believed to have respectfully anchored her spot in the world of wealth by landing a $1.2 billion deal with beauty mogul Coty. This January, Jenner sold 51% of her Kylie Cosmetics line to Coty, a gigantic move, highlighting her career. Jenner and her momager-Kris Jenner started the cosmetic venture after Kylie was caught lying about lip injections back in 2015. Forbes claimed the Coty deal was one of the greatest celebrity cashouts of all time, and the transaction confirmed what Kylie and Forbes had declared back in March 2019: that Kylie was, indeed, a billionaire.

Kylie has since responded to Forbes’ Friday report, refuting that she lied about her finances. “What am I waking up to. I thought this was a reputable site. All I see are a number of inaccurate statements and unproven assumptions, lol. She tweeted. “I’ve never asked for any title or tried to lie my way there EVER. period.”

After landing the November acquisition, Coty released the following in admiration of her, “Kylie is a modern-day icon, with an incredible sense of the beauty consumer,” Coty chairman Peter Harf gushed.

But then things changed. Coty, a publicly-traded company, has released its filings from the past six months, which showed the deal’s small black print. The fine print revealed the family’s financial and best-kept secret: that Kylie’s business is significantly smaller and less profitable than what the family has spent years wanting their fans, media outlets, and industry to believe. Including Forbes.

But Forbes isn’t surprised. It expected white lies, omissions, and outright fabrications from the family that perfected-then monetized-the concept of “famous for being famous.” Forbes even compared the clan to Donald Trump, who shares a similar obsession with net worth.

The long-running and top America business magazine says the Kardashian-Jenner clan have unusual lengths they are willing to go in a desperate attempt to appear richer than how rich they already are. This included inviting Forbes into their mansions and CPA’s offices, and even created tax returns that were” likely forged.”

“It’s fair to say that everything the Kardashian-Jenner family does is oversized,” says Stephanie Wissink, an equity analyst covering consumer products at Jefferies. “To stay on-brand, it needs to be bigger than it is.”

But even the Kardashian-Jenner family can’t steer clear of COVID-19’s wrath. Forbes analyzes this new information, and the impact of COVID-19 on beauty stocks and consumer spending now believe Kylie, even after pocketing an estimated $340 million after-tax from sale, is not a billionaire.

With Kylie’s earning from modeling, endorsements, and appearances on the family show’ Keeping Up With the Kardashians,’ she took $250,000 of those funds to produce the first 15,000 lip kits in November 2015. After her embarrassing confession of lying, the Jenners seized the marketing opportunity and used their high Instagram following to make sales. Kylie’s $29 kits sold out in less than a minute. “Before I even refreshed the page, everything was sold out,” she told Forbes in a previous report.

The business resulted in a dozen more products by the end of 2016. Forbes says her reputation as a new entrant in cosmetics skyrocketed. It was her older sister Kim who first graced the cover of Forbes, and soon the Jenner publicists began a campaign to “get a Forbes cover for Kylie.”

It has been reported revenues were $400 million over the business’ first 18 months, with a personal take-home of $250 million for Kylie, they said, even opening their books to show proof. Forbes says during meetings at Kris Jenner’s Hidden Hills, CA estate, and the family accountant’s nearby office, Forbes was shown tax returns detailing $307 million in 2016 revenues and personal income of more than $110 million for Kylie that year. This was enough to place her on the Celebrity 100 list as the second in command-behind Taylor Swift.

However, Forbes said although the documents look authentic and had her signature, they were not exactly convincing since the story they told of eCommerce brand Kylie Cosmetics growing from nothing to $300 million in sales in a single year was hard to believe.

Forbes talked over the claims they deemed implausible with a handful of analysts and industry experts who agreed and settled on a more reasonable estimate for their 2017 Celebrity 100 list: $41 million in overall earnings for Kylie, which placed her No. 59 on their list.

Kris was “so frustrated,” the Jenners’ PR said. “We’ve done so much.” They instead appeared two months later in WWD, a trade publication known as “the bible of fashion,” presenting the numbers they first tried to give Forbes.

“There has been raging speculation about the size of her business, with guesstimates ranging from $50 million up to $300 million,” the story reads. “Well, here’s the bad news for more-established beauty players: Jenner’s surpassed the higher figure with ease. Kylie Cosmetics actually has done $420 million in retail sales—in just 18 months—Kris Jenner revealed…” It was the first time the Jenners publicly disclosed the size of the business; the story boasted—” and they provided WWD with documentation.”

By the summer of 2018, news spread of the sky-high revenue numbers among media outlets. When Forbes set out to calculate Kylie’s net worth for their list of the richest self-made women, the industry’s opinion of Kylie’s business had already shifted, and analysts said those numbers were “totally possible.”

The Jenners offered Forbes their own number: 2017 revenues were up to 7%, they said, to $330 million. “No other influencer has ever gotten to the volume or had the rabid fans and consistency that Kylie has had for the last two and a half years,” an executive eCommerce platform Shopify, which manages Kylie’s online store, told Forbes at the time. Based on her rapid success- certified by industry sources plus those 2016 tax returns, Kylie appeared on the cover of Forbes magazine in July 2018, ranking 27th on their list of the richest self-made women at the age of 20. She was supposedly worth $900 million, and would soon become the youngest self-made billionaire ever.

“Thank you for this article and the recognition,” Kylie Instagrammed. Kim Kardashian West tweeted her congratulations—twice. “I am SO proud,” Kris Jenner wrote, finally pleased.

If anyone doubted that she was a billionaire, those thoughts were erased by November 2019. Coty announced it was snapping 51% of Kylie Cosmetics for $600 million when they reached 8.6 billion in revenues. This gave Kylie at the time 21, a ton of money, and proof that she was of billionaire status. The stock analysts did seem skeptical over the fact that Coty was paying a celebrity brand that could prove to end up a fad. They wanted to know how Coty could be sure her brand would remain committed to promoting the business in the years to come.

But what seemed problematic was Kylie’s financials. Revenues over 12 months preceding the deal: $177 million, according to Coty’s presentation-far lower than the published estimates the first time. And even worse, Coty said sales were up 40% in 2019, meaning the business generated $125 million that year, nowhere near the $360 million the Jenners claimed to Forbes. Then the launch of her skincare in May 2019 did $100 million in revenues in its first month and a half, Kylie’s reps told Forbes. 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, 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, Forbes asks.

One explanation of this is that the Data from eCommerce firm Rakuten, which tracks a select number of receipts, suggests a 62% decline in Kylie’s online sales between 2016 and 2018.

Industry experts, polled by Forbes, think the business couldn’t have collapsed that much and so quickly. More than likely, it was never that big to begin with. Furthermore, the Jenners have lied about it ever since 2016-including having their accountant draft tax returns with false numbers to help juice Forbes, and although they can’t prove they’re fake, the magazine says it’s clear Kylie’s camp has been lying.

“You have to remember they are in the entertainment business,” says Ten. “Everything in entertainment has to be exaggerated to get attention.”

Given the new information and factoring in the pandemic, Forbes has recalculated Kylie’s net worth and concludes she is not a billionaire. A more realistic account puts it just under $900 million despite the headlines surrounding the Coty deal that seemed to confirm her billionaire status.

Forbes reports the usually chatty family stopped answering questions when pressed for answers.

Kylie Jenner

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