{"id":139948,"date":"2025-05-28T23:35:08","date_gmt":"2025-05-28T23:35:08","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/139948\/"},"modified":"2025-05-28T23:35:08","modified_gmt":"2025-05-28T23:35:08","slug":"e-l-f-acquires-hailey-biebers-rhode-for-1-billion","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/139948\/","title":{"rendered":"E.l.f. Acquires Hailey Bieber\u2019s Rhode for $1 Billion"},"content":{"rendered":"

E.l.f<\/a> announced Wednesday it will acquire Hailey Bieber\u2019s Rhode for $1 billion, in a blockbuster deal that brings Gen-Z\u2019s buzziest brand into the fold of the industry\u2019s most disruptive conglomerate.<\/p>\n

Since it was founded in 2022, Rhode has quickly become the darling of the global beauty market, celebrated for its high-tech yet accessible skincare formulas and its aspirational creative. In its latest fiscal year ending in March, the brand generated $212 million in net sales from just 10 products, including hits like its Pocket Blush and Glazing Milk essence. This month, Rhode announced it will launch in all Sephora<\/a> US and Canada stores in the fall, and in Sephora UK by the end of the year.<\/p>\n

E.l.f., meanwhile, has grown rapidly for the better part of a decade, thanks to its reputation for high-quality products at ultra-affordable prices. While E.l.f. was originally known as a \u201cdupe\u201d brand when it launched in 2004, it has surprised many in the industry by rolling out a steady stream of innovative new products, at a speed to market and price point few rivals have been able to match. Sales have grown for 25 consecutive quarters.<\/p>\n

That charmed run is showing some signs of wear, however. On Wednesday, the company reported sales of $1.3 billion for the fiscal 2025 year, up 28 percent \u2014 the fastest pace of any large beauty company, but a far cry from the more than 77 percent increase it logged in fiscal 2024<\/a>. In its fourth quarter, sales rose just 4 percent from a year earlier. Adjusted earnings before interest, taxes, depreciation and amortisation increased 26 percent. <\/p>\n

In an exclusive interview with The Business of Beauty, E.l.f. chairman and chief executive Tarang Amin said the two brands recognised the \u201cpower\u201d of joining forces.<\/p>\n

\u201cWhat we saw in Rhode was another like-minded disruptor,\u201d he said. \u201cI see Hailey as much more than a celebrity, she is one of the most thoughtful founders I\u2019ve ever met. She has incredible instinct, a beautiful aesthetic that\u2019s absolutely resonating with her community.\u201d <\/p>\n

Amin called that community \u201cfervent\u201d and cited the response to the brand\u2019s recent Los Angeles pop-up, which saw some customers camped out overnight in line to attend, as proof that shoppers aren\u2019t just buying Rhode products but into the growing lifestyle brand.<\/p>\n

Bieber will continue in her capacity as Rhode co-founder, chief brand officer and head of innovation, as well as act as a strategic advisor for E.l.f. The remaining Rhode team, including co-founders Lauren and Michael D. Ratner and CEO Nick Vlahos, previously of The Honest Company, will join E.l.f. Beauty. Under the terms of the agreement, E.l.f. has agreed to pay $800 million for the brand \u2014 $600 million cash and $200 million in shares \u2014 with a potential $200 million earnout based on the brand\u2019s growth over the next three years. <\/p>\n

\u201cFrom day one, my vision for Rhode has been to make essential skin care and hybrid makeup you can use every day,\u201d Bieber said in a statement. \u201cJust three years into this journey, our partnership with E.l.f. Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community with even more innovative products and widen our distribution globally.\u201d<\/p>\n

The Rhode to E.l.f.<\/p>\n

Amin said that E.l.f. and Rhode approached one another, and had been in discussions since the fall. (Vlahos<\/a> and Amin formerly worked together at Clorox.) <\/p>\n

\u201cShe could have easily gotten more money from private equity or someone else, but she cares about building this brand for the long term,\u201d Amin said. <\/p>\n

Rhode\u2019s success has come even as the celebrity beauty boom has faded. Brands like Ariana Grande\u2019s R.E.M. Beauty<\/a> have faced headwinds. As the number of labels fronted by famous faces has grown, consumers have become increasingly sceptical, seeing many celebrities and influencers as lacking authority or an authentic interest in beauty.<\/p>\n

Bieber, for her part, has long been a beauty lover and worked with lines like Bareminerals well before her launch of Rhode. She also regularly promotes other lines, including giving a callout to indie line Ami Col\u00e9\u2019s mascara for her recent Vogue cover alongside her cult Peptide Lip Treatments. <\/p>\n

She is also a savvy marketer, popularising beauty trends like \u201clatte makeup\u201d and \u201cdonut glazed skin\u201d well before she could attach products to social virality. Products do remain a draw, despite the glut of similar offerings. (Rhode\u2019s lip treatments, though not a first-of-its-kind product, reportedly surpass direct sales of others like Summer Friday\u2019s Lip Butter Balm.) Adjacent merchandise like Rhode\u2019s lip gloss-toting phone case cause a frenzy, thanks to Bieber\u2019s natural cultural cachet. <\/p>\n

The deal also breaks an M&A logjam in the beauty market. For the better part of year, cosmetic lines like Kosas, Makeup by Mario, One\/Size and even Selena Gomez\u2019s Rare Beauty<\/a> have been struggling to find buyers. Some would-be acquirers like the Est\u00e9e Lauder Companies and Shiseido have little cash to spare, while private-equity firms are sceptical that buzzy brands can maintain their momentum as the beauty category enters a downturn. <\/p>\n

Along with L\u2019Or\u00e9al and Puig, E.l.f. has remained in the hunt for brands to buy. The company\u2019s last deal was in 2023, when it acquired Naturium<\/a>, developed by influencer Susan Yara and beauty brand accelerator The Center in a $355 million cash and stock deal. The Naturium deal reflected E.l.f\u2019s interest in not only fast-growing beauty brands across the market (beyond Target, the brand was sold at prestige retail Space NK), but also in highly influential and famous faces. In 2020, E.l.f. incubated its first brand, fronted by musician Alicia Keys; that same year, it also made its first purchase with clean beauty brand W3ll People for $27 million. <\/p>\n

Amin said all the brands in its portfolio experienced sales growth in its fiscal year, with Naturium experiencing its best year since launching in 2019. <\/p>\n

A New Source of Strength<\/p>\n

Bieber\u2019s Rhode will benefit E.l.f. in a number of ways. It will be E.l.f.\u2019s first brand in Sephora US, Canada and the UK (E.l.f. recently launched in Sephora Mexico), and will also increase the conglomerate\u2019s gross margin, with Rhode\u2019s 10 products ranging from $18 to $38. Core E.l.f. makeup and E.l.f. Skin products sell for $6.50 on average, less than mass competitors that retail for upwards of $10 or prestige players that sell for well over $20. Most importantly, it will give E.l.f. a stronger foothold with younger Gen-Z consumers, a fickle but important cohort as beauty wallet size shrinks. <\/p>\n

E.l.f continues to outperform larger rivals; its sales performance last year, while lower by the company\u2019s recent standards, is the envy of conglomerates like Coty, Shiseido and Est\u00e9e Lauder, which have seen declines. <\/p>\n

Still, the company faces headwinds as the majority of its products are produced in China, and are subject to President Trump\u2019s \u201cLiberation Day\u201d tariffs. Last week, E.l.f. announced via social media<\/a> that it was increasing prices across its portfolio by $1. Amin, however, stressed the firm\u2019s supply-chain agility as well its international business, which is up 60 percent and is not subject to tariffs.<\/p>\n

It\u2019s perhaps E.l.f.\u2019s digital-first roots that makes it the right conglomerate to scale Rhode. Beyond its upcoming retail expansion, the company plans to continue its investment in marketing, which has spanned out-of-the-box Super Bowl commercials and collaborations with Chipotle.<\/p>\n

\u201cWe\u2019ve talked about keeping our marketing rates, even in this environment, at 24 to 26 percent of net sales, and we\u2019re doing that because our marketing is working,\u201d Amin said. The significant return on its spend has formed a cycle of growth: \u201cIt continues to fuel our results, and we continue to invest in our own brands, and gives us the ability to acquire new brands that can continue to fuel our growth.\u201d<\/p>\n

Rhode, with its three years of category-shifting momentum, will be an easy sell. Still, Amin and Bieber look forward to growing the brand in tandem. <\/p>\n

\u201cWe\u2019re a founder\u2019s dream,\u201d said Amin. \u201cWe don\u2019t overintegrate a brand \u2026 We\u2019re not trying to change [Rhode]. We really seek to nurture a founder\u2019s vision.\u201d<\/p>\n

Hailey Bieber and E.l.f.\u2019s Tarang Amin will speak together for the first time at The Business of Beauty Global Forum. Sign up<\/a> here to reserve your space. Full access to The Business of Beauty Global Forum livestream<\/a> is exclusive to BoF Professional All-Access and BoF Professional Beauty & Wellness members.<\/p>\n","protected":false},"excerpt":{"rendered":"E.l.f announced Wednesday it will acquire Hailey Bieber\u2019s Rhode for $1 billion, in a blockbuster deal that brings…\n","protected":false},"author":2,"featured_media":139949,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[51,60724,49241,16,15],"class_list":{"0":"post-139948","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-conglomerates","10":"tag-mergers-acquisitions","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114588086277912728","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/139948","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=139948"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/139948\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/139949"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=139948"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=139948"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=139948"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}