In business it's all about the bottom line, and for the American entrepreneur Sara Blakely, banishing unsightly bulges and the curse of VPL (visible panty lines) has proved her ticket into the ranks of the world's super rich.

Blakely has made her debut on Forbes magazine's list of world billionaires thanks to the success of her underwear empire, Spanx. The 41-year-old joins an elite, global cast, mostly male, which includes Microsoft's founder, Bill Gates, and investment guru Warren Buffett. The richest woman on the list is Christy Walton, who inherited her $25bn (£16bn) fortune from her late husband John, a member of the Walmart dynasty.

Blakely's eureka moment came when she spotted a gap in the market after being unable to buy underwear that would avoid VPL under her cream-coloured trousers. She ended up cutting the feet out of a pair of tights, and, hey presto, the so-called power-pants phenomenon was born.

There is some anecdotal evidence to suggest that not all women find Spanx pants comfortable, in the Guardian's office at least: quite the reverse. But you can't argue with the figures.

Spanx now has annual sales of $250m and a range of more than 200 products that include armpit-high shorts and whole bodysuit girdles in three grades of suction – medium, super and super-duper.

The Atlanta-based firm, which employs 125 staff, with only 16 men among them, has as its motto: "Changing the world one butt at a time."

Spanx's success has now launched Blakely on to the celebrity circuit, with Oprah Winfrey – ranked 442nd richest person in the world with a $2.7bn fortune – one of her biggest fans. Indeed, her success is partly due to Winfrey, who described Spanx as among her "favourite things of 2000" on her chat show and sent a film crew to profile Blakely.

Thousands of orders rolled in as the video was aired, and the top US department store Neiman Marcus and its rivals clamoured for stock. Other A-listers such as Gwyneth Paltrow, Beyoncé and Eva Longoria admitted turning to Spanx to boost the wow factor on the red carpet. And not only female stars rely on Spanx to offer "tummy taming, thigh trimming and butt boosting" improvements.

Blakely saw the opportunity to double her customer base after Hollywood agents started requesting extra-large sizes, and it became clear that male stars were also relying on the clothing's suction powers to help them cut it in a tuxedo. Men can now buy "hold it in" T-shirts that the firm claims enable chaps to "look sharper, stand taller and feel stronger".

Blakely's path to success was not without personal risk. At 29, the entrepreneur, whose early career included a stint as a Disney World ride greeter, ploughed her $5,000 life savings into developing the prototype pants. At the time she was a photocopier sales rep and moonlighting stand-up comedian. The business was at first run from her spare room.

She says success "wasn't easy" and recounts taking a week off in 2000 to drive through North Carolina to persuade hosiery makers to embrace her idea. "I was shocked that only men seemed to make women's undergarments," she told one interviewer, recalling dozens of cold calls to textile mills across the south. "They all thought I was crazy." Numerous knock-backs later, a manufacturer relented only when Blakely's ideas got the backing of his two daughters.

Today, Forbes and Wall Street put Blakely's net worth at about $1bn; she ranks 1,153 of 1,226 on the Forbes list, level-pegging with Britain's Carphone Warehouse billionaire, Charles Dunstone.

Blakely, who is the advertising face and body of Spanx as well as its chief executive, also still owns 100% of the company. She has no outside investors, no bank debts. The runaway success of Spanx in the past decade means she is also crowned, by Forbes, the youngest female self-made billionaire in the world.

Spanx's owner is not the only underwear tycoon to join the billionaire club this year. Kevin Plank, head of Under Armour, also makes his debut. In the early 1990s he began with the idea of a sweat-soaking sports T-shirt. By 1996, aged 23, he had founded the firm from his grandmother's basement with $16,000 in cash and $40,000 on credit cards. He expanded into sports bras and basketball shoes. Forbes puts his net worth at $1.1bn.

Like Spanx, the Baltimore firm has spawned hundreds of imitations. High- street chains such as Marks & Spencer and Blacks produce girdles and long johns in the image of these US brands.