Business Wars: Spanx vs Skims | Kim-Oh-No | Episode 2 Summary

Hosted by David Brown, Business Wars delves into the fierce competition between industry giants, exploring the strategies, conflicts, and pivotal moments that shape the business landscape. In Episode 2, "Spanx vs Skims | Kim-Oh-No," the spotlight is on the intense rivalry between Spanx, founded by Sarah Blakely, and Skims, launched by Kim Kardashian. This summary captures the key discussions, insights, and conclusions drawn from the episode.

1. Introduction and Background

The episode opens by setting the stage in June 2019, showcasing Kim Kardashian's ambitious venture into the shapewear market. After years of supporting her own successful business endeavors, Kardashian is now poised to challenge Spanx, the established leader in the industry.

Notable Quote:

• [00:00] David Brown: "Kim Kardashian paces the floor of the offices of her shapewear company."

2. Spanx: The Original Shapewear Pioneer

Founded in 2000 by Sarah Blakely, Spanx revolutionized the shapewear industry by introducing footless pantyhose designed to enhance confidence and comfort. The brand quickly became synonymous with shapewear, leveraging celebrity endorsements and strategic marketing to dominate the market.

Key Points:

• Spanx was profitable from day one, reaching $250 million in annual revenue by 2011.
• Sarah Blakely's hands-on approach as a founder contributed significantly to Spanx's success.
• Spanx relied heavily on influencer marketing, with celebrities like Oprah and Kim Kardashian promoting the brand.

3. Kim Kardashian's Foray into Shapewear: The Birth of Skims

In 2017, leveraging her fame and deep understanding of shapewear limitations, Kim Kardashian embarked on creating her own line. Collaborating with Jens and Emma Greedy, Kardashian aimed to create "solutionwear" that emphasized comfort and body positivity, distinguishing Skims from Spanx's more constrictive offerings.

Key Developments:

• Formation of Skims: Kardashian serves as Creative Director, Jens Greedy as CEO, and Emma Greedy as Chief Product Officer.
• Product Vision: Emphasis on inclusive sizing (XXS to 4XL) and a broad color palette to cater to diverse consumers.
• Innovation: Shift from traditional shapewear to versatile, everyday wear that aligns with the body positivity movement.

Notable Quote:

• [13:22] Jens Greedy: "Oh, Kimchi Skimpiest Kim briefly."
• [13:26] David Brown: "She says she likes Kimono, sounds elegant."

4. The Naming Controversy and Rebranding

Upon launching in June 2019, Skims initially branded as "Kimono." However, this sparked backlash from Japanese designers and cultural purists who objected to the appropriation of a traditional garment's name. The controversy forced Kardashian and her team to act swiftly to salvage their brand.

Key Events:

• Backlash: Petition against the use of "Kimono" garnered 11,000 signatures in a day.
• Decision to Rebrand: Three days after the controversy, Kardashian renamed the company to "Skims" to better reflect its inclusive and solution-oriented mission.

Notable Quote:

• [18:10] Kim Kardashian: "Sometimes self-care looks like binge-watching cooking shows in your PJs..."

5. Skims' Strategic Launch and Growth

Despite the initial setback, Skims launched in September 2019 with a successful first drop, selling out in under 10 minutes. Kardashian's adept use of social media and influencer partnerships fueled Skims' rapid growth, distinguishing it from Spanx through its agile drop model and continuous product innovation.

Strategies Employed:

• Limited Drop Model: Creating scarcity and urgency by releasing limited quantities periodically.
• Product Diversification: Expanding beyond shapewear to include underwear, bras, T-shirts, and cozy wear.
• Global Expansion: Entered markets in the UK and the Middle East by the end of 2019.

Notable Quote:

• [28:11] David Brown: "I'd love to hear about them. Tell everyone I don't care if someone's a receptionist or a VP, if they have an idea for a product they should submit."

6. Spanx's Struggles and Blackstone Acquisition

The COVID-19 pandemic posed significant challenges for Spanx as demand for traditional shapewear declined. In contrast, Skims thrived by pivoting to comfortable, athleisure-inspired products. Facing declining sales, Spanx sought investment and ultimately secured a majority stake acquisition by Blackstone Group in 2021.

Key Developments:

• Spanx's Decline: Sales decreased by 30% in early 2020, and Spanx was removed from Forbes' billionaires list.
• Blackstone's Acquisition: Provided Spanx with the necessary funds to expand its product line and rebrand, but also introduced new executives and strategic shifts.
• Challenges Post-Acquisition: Spanx struggled to shift public perception and maintain its market share against the agile and consumer-centric Skims.

Notable Quote:

• [27:24] Sarah Blakely: "We've made as many of the short-term changes as we can... Now it's time to get creative."

7. The Intensifying Competition

By 2021, Skims had established itself as a formidable competitor, valued at $1.6 billion and securing partnerships like being the official underwear provider for Team USA. Meanwhile, Spanx continued to battle market perceptions and adapt its strategies under Blackstone's guidance.

Comparative Analysis:

• Skims:
  • Valued at $1.6 billion by 2021.
  • Expanded product lines to include maternity wear and summer collections.
  • Explored physical retail presence with flagship stores in major cities.
• Spanx:
  • Implemented new marketing campaigns to reposition the brand.
  • Continued to innovate with new product offerings but struggled to regain momentum.
  • Faced underperformance despite strategic pivots.

Notable Quote:

• [35:09] Jens Greedy: "Wow. An all-woman team. That's incredible."

8. Current Status and Future Outlook

As of 2024-2025, Skims continues to experience robust growth, projecting $1 billion in net sales and contemplating an IPO. In contrast, Spanx remains under pressure to redefine its brand and reclaim its position in the market. The episode underscores the critical importance of adaptability, brand perception, and strategic agility in maintaining industry leadership.

Insights:

• Brand Association: Skims' close association with Kim Kardashian presents both a strength and a vulnerability, relying heavily on her personal brand.
• Market Adaptation: Skims' ability to swiftly adapt to market trends and consumer preferences has been pivotal to its success.
• Spanx's Legacy vs. Innovation: While Spanx laid the groundwork for modern shapewear, its challenges highlight the necessity of continuous innovation and market responsiveness.

Notable Quote:

• [40:36] Jens Greedy: "It's Skims, the shapewear and clothing."

9. Concluding Thoughts

The episode concludes by reflecting on the dynamic interplay between Spanx and Skims, emphasizing the lessons learned from their rivalry. It highlights the delicate balance between leveraging founder influence and fostering a resilient, adaptable brand identity. As the shapewear market evolves, both companies serve as case studies in the complexities of business competition, brand management, and strategic foresight.

Final Quote:

• [44:38] David Brown: "Business is business, but to founders of a company, business is personal too."

Episode Credits:

• Host: David Brown
• Story: Austin Rackless
• Producers: Tristan Donovan, Grant Rutter, Desi Blaylock, Callum Plews, Emily Frost, Dave Schilling
• Sound Design: Josh Morales
• Voice Acting: Chloe Elmore, Jenny W. Chan
• Fact-Checking: Gabrielle Drollet
• Executive Producers: Ginny Lauer Beckman, Marshall Louie

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