Skims, which operates its flagship store on West Hollywood’s Sunset Strip, announced a fraud settlement Tuesday with Kim Kardashian’s shapewear brand paying $200,000 after overcharging New Jersey customers for five years. The settlement comes nine months after the store opened at 8569 W. Sunset Boulevard last April.
New Jersey Attorney General Matthew Platkin says Skims charged customers sales tax from 2019 through 2024 on clothing that’s supposed to be exempt in the state.
“Technical error” or fraud?
A Skims spokesperson blamed a “technical error” in the sales tax system. The company says it’s been fixed.
Platkin’s office didn’t buy the excuse. They accused Skims of “unconscionable business practices.”
“We’re holding Skims accountable because their conduct harmed New Jersey consumers by requiring them to pay more than what they owed,” Platkin said. “We won’t tolerate conduct that unlawfully takes money out of the pockets of hard-working New Jerseyans.”
The Skims fraud case began after customers complained about overcharges as early as 2021. Reddit posts show people calling out the problem and contacting the company directly. The state opened an investigation after getting a complaint in early 2024.
What happens next
Skims has to refund affected customers. The January 16 consent order requires the company to “use best efforts” getting refunds out in a “reasonably timely manner” for the next four years.
The company released a statement saying it’s “deeply committed to the highest standards of compliance” and has “enhanced safeguards” in place now.
Kardashian and CEO Jens Grede started Skims as an online store in 2019. The brand opened brick-and-mortar locations across the country before landing on the Sunset Strip last spring. The 4,546-square-foot West Hollywood flagship sits next to Mel’s Drive-In.
The company was valued at $5 billion in November.
Poorly written article with a lot of incorrect information. This lawsuit has NOTHING to do with the store in West Hollywood. This is based on sales in NJ and/or online NJ shoppers.
Thank you for flagging the poorly placed “West Hollywood flaship store” references. The The flagship reference was def confusing. Thanks again!
how long until this location closes? Never see anyone in there other than staff?