“Who do you think you have in front of you? You better have my money”, thus reads one of the most controversial lyrics of the world star Rihanna. However, the amount for which she decided to compose those verses would have little to do with the enormous amount for which she expects the market to value her lingerie company Savage X Fenty: 3,000 million dollars.
The singer is working on the IPO with her advisors, an operation that could take place this year.
As sources close to the proposal have assured Fortune, Rihanna is working with Goldman Sachs and Morgan Stanley to carry out this operation in the coming months. However, there is no final decision and plans could vary drastically.
In fact, despite the fact that the public offer did not take place, the firm is still expected to reach a value of 217 million by 2025.
It should be noted that this valuation would respond to an interest in the name of the founder than in the performance of the store itself. “Right now, $3 billion may be too high a valuation because their items are not expensive. They will have to sell a large volume of product, about $140 million Ebitda,” says Shannon Coyne, co-founder of consultancy Bluestock Advisors.
However, the company is only three years old, in which it has experienced a 150% compound annual revenue growth rate in each of those years.
On the other hand, fans of the lingerie brand are demanding the creation of a line for pregnant women after breaking the news, just three months ago, that the world star is expecting a child with rapper A$AP Rocky.
Savage X raised 125 million in its latest funding round
The Barbadian singer has managed to get big investors to keep an eye on her business. In fact, Savage X, which is just one of his three companies, managed to raise $125 million in January in a funding round led by Neuberger Berman, involving investors including L Catterton, Avenir Growth Capital, Sunley House Capital Management and Marcy Venture Partners.
So far, the company, in which Rihanna owns just 30%, has acquired $310 million in funding.
If the public offer finally takes place, it is expected that this 30% ownership will be transferred to the shares, which would leave the businesswoman with a participation of 990 million, if Savage X were valued at 3,000 million dollars.
Rihanna has been able to capture the desires of consumers for social inclusion
But what have the big firms seen in this lingerie company? Savage X, in the same way as Fenty Beauty and Fenty Skin, have been able to respond to a latent need within urban and suburban culture.
Under the shelter of the influence of Rihanna, whose fortune is valued at 1,700 million, according to Forbes, these brands have captured the attention of a large part of Western youth. Young women, not just African-Americans, who have found in the brands launched by the singer a way to express her culture and empower themselves.
It is not necessary to refer to the US to understand this trend. Here, in Spain, the rise of urban music, with female singers like Bad Gyal, Chanel, Rosalía or La Zowi, has caused tens of thousands of women to align themselves with Afro-American culture, bringing fashion and aesthetics from the American neighborhoods to the streets of Spain.
A need that the rest of the brands are not fully understanding and, therefore, are not satisfying. That’s where Rihanna has found her niche with her three makeup and lingerie companies.
Fenty Beauty, for example, has more than 40 foundation shades, a palette head and shoulders above the rest. This simple gesture of social inclusion has also served as a promotional catapult for their brands. Thanks to these types of actions, the company is valued at 2.8 billion dollars.
Likewise, Savage X offers sizes that meet women with sizes from XS to 4XL.
The lingerie company already has five physical stores, located in Las Vegas, Los Angeles, Houston, Philadelphia and Washington DC. Precisely, five regions where urban culture is enormously widespread.
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