Mirror Review
May 29th, 2025
Summary:
- Hailey Bieber sells Rhode Skincare, a brand she co-founded in 2022 and named after her middle name, to e.l.f. cosmetics, in a deal valued at up to $1 billion.
- The deal is expected to be finalized later this year, during the second quarter of e.l.f.’s fiscal 2026.
- Hailey will remain as Rhode’s Chief Creative Officer and Head of Innovation.
- This acquisition marks e.l.f.’s largest to date and signifies its continued expansion into the skincare market.
All You Need to Know About the e.l.f. Rhode Deal
This acquisition isn’t just another business transaction; it’s a strategic partnership between two major players in the beauty world. Here are the details.
- The Financials Behind the Billion-Dollar Rhode Deal
e.l.f. Beauty is committing a significant sum, reflecting Rhode’s impressive growth. The deal structure includes:
- An initial payment of $800 million, comprising $600 million in cash and $200 million in stock.
- An additional $200 million payout contingent on Rhode’s sales growth over the next three years.
This is e.l.f.’s biggest acquisition ever, surpassing its $355 million purchase of Naturium in 2023.
However, the deal comes when e.l.f. faces potential challenges, including funding $600 million with debt during high-interest rates and navigating potential tariffs on products sourced from China.
- Rhode’s “Rocketship Growth”
Launched just three years ago in 2022, Rhode has seen phenomenal success. Its popularity, driven largely by social media buzz and Hailey Bieber’s influence, has been remarkable.
- Sales Milestone: Reached $212 million in net sales in under three years, primarily through direct-to-consumer sales.
- Product Strategy: Focused on a curated line of 10 essential skincare and hybrid makeup items, like the “Peptide Lip Treatments” and “Pocket Blush”.
- Marketing Power: Became the No. 1 skincare brand in earned media value in 2023.
- Expansion Plans: Set to launch in Sephora stores across the US, Canada, and the UK later this year.
e.l.f. CEO Tarang Amin expressed his admiration, stating, “In less than three years, they’ve gone from zero to $212 million in net sales… I didn’t think that was possible”.
- What does the deal mean to e.l.f. and Rhode Skin
For both companies, this partnership offers significant advantages.
- For e.l.f.:
- Deepens its footprint in the booming skincare market.
- Provides access to a higher-income demographic, as Rhode’s products have a higher price point (around $20s) compared to e.l.f.’s core offerings ($6.50 average).
- Leverages Rhode’s strong digital presence and Gen-Z appeal.
- Gains entry into Sephora US, Canada, and UK.
- For Rhode:
- Gains access to e.l.f.’s operational expertise, resources, and established global distribution channels.
- Benefits from e.l.f.’s proven marketing prowess and supply-chain agility.
Hailey Bieber commented, “Our partnership with e.l.f. Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community… and widen our distribution globally”.
Tarang Amin added, “What we saw in Rhode was another like-minded disruptor”.
Hailey Bieber’s Continued Vision For Rhode Skin
Hailey Bieber isn’t stepping away. She will continue to shape the brand’s future as Chief Creative Officer and Head of Innovation, and also act as a strategic advisor for e.l.f..
She emphasized her commitment: “I want to be the biggest beauty brand in the world, and I believe that Elf is going to help me get there”.
Her co-founders and the existing executive team will also remain with the business.
What This Means for the Beauty Market
This $1 billion deal is a standout in a currently cautious M&A landscape, potentially renewing interest in beauty brand acquisitions.
It highlights the power of authentic celebrity-founded brands that connect deeply with consumers.
Rhode’s success, built on Hailey’s genuine involvement and strategic marketing, sets a high bar for future celebrity beauty ventures.
Now, as Hailey Bieber sells Rhode to e.l.f., the industry watches with anticipation.
This partnership combines e.l.f.’s disruptive market strategy with Rhode’s cult status, promising an exciting new chapter for both brands and potentially reshaping the beauty and skin landscape.
