From its Nike partnership to tacking on an extra $1 billion to its valuation this week, Kim Kardashian’s Skims keeps collecting milestones. Each one raises the stakes for the brand’s next moves.

In just six years, Skims has grown from a shapewear startup built on size and shade inclusivity into a lifestyle brand spanning loungewear and athleisure — the latter solidified with its NikeSkims launch in September. Investors see virtually limitless potential: This week, Skims announced a $225 million capital raise led by Goldman Sachs Alternatives that valued the company at $5 billion, up from $4 billion in 2023. These valuations are all the more impressive coming in an era when venture capital is generally sceptical of backing new consumer brands.

The brand’s ascent rests on a few key pillars: functional-but-sexy shapewear in its signature muted shades; the marketing and cultural fluency of Kardashian and co-founder Jens Grede (a holiday campaign starring Nara Smith and Lucky Blue Smith is impossible to avoid right now); and a fast-growing retail rollout. Skims now operates 18 stores in the US and two franchise locations in Mexico, with London and Dubai coming soon. The company expects net sales of over $1 billion this year.

Even so, a $5 billion valuation isn’t a reward for past success; it’s a vote of confidence in what’s to come. Here, there are questions. Grede described NikeSkims to The Business of Fashion in September as “one of the biggest consumer launches of the year.” But opening-day crowds were small, and the new brand — Nike’s first since Jordan — hasn’t generated Skims-scale buzz, even as its second collection dropped this week.

Skims is also banking on category expansion to fuel growth. That means getting beauty right: Kardashian confirmed her brand would be entering that market on the “Call Her Daddy” podcast in October. But beauty is a market Kardashian has struggled to get right in the past: She launched KKW Beauty in 2017. Coty bought a majority stake in 2021, and the line relaunched as Skkn by Kim in 2022, but struggled to stand out in a category crowded with celebrity brands. In March, Skims bought back the beauty business from Coty.

Skims is in less danger of getting lost in the beauty mix this time around. Over the summer, a controversial “shaping” face mask — viewed as a teaser for the brand’s beauty relaunch — showed Kardashian flicking at both innovation and provocation. In November, the company hired Ami Colé founder Diarrha N’Diaye as executive vice president of beauty and fragrance. N’Diaye, who previously held roles at Glossier and L’Oréal, built Ami Colé into a cult-favourite makeup brand. But it shuttered earlier this year despite L’Oréal backing, Sephora placement and viral hits like its lip-treatment oil — a closure that reverberated across the Black beauty community.

Skims also can’t coast on past success in its core business. The intimates and athleisure markets are crowded, and there have been many other would-be disruptors. One, Parade, shut down last month. Meanwhile, Victoria’s Secret, still the category’s dominant player even after years of declining sales and waning cultural cachet, is showing signs of life (or at least, its stock price is; shares have doubled off of lows hit this spring). In women-focused athleisure, Alo Yoga and Vuori have the momentum, while Lululemon reigns supreme. In this category, Skims’ valuation looks less impressive next to Lululemon’s $21 billion market capitalisation (let alone Nike’s $95 billion).

Skims has said it will use its new funding to open more stores and expand globally. Investment in both areas must be strategic but also quick. Most of the competitors named in the previous paragraph are rapidly expanding their retail footprint. And while the conventional wisdom when Skims was founded in 2019 was that online brands marketed through social media were the future, the last half-decade has shown time and again that prime store locations in top malls and shopping neighbourhoods is key to securing large numbers of loyal, repeat customers.

Skims has a path to take its place alongside Lululemon and Victoria’s Secret, and has made all the right moves so far. But it’s in a race against time to establish itself with consumers before they move onto the next challenger brand of the moment.