Cosmetics corporation E.l.f purchases Hailey Bieber's Rhode beauty empire for a whopping $1 billion
AP News: E.l.f. Beauty Acquires Hailey Bieber's Rhode Skincare Brand for $1 Billion
E.l.f. Beauty has announced its acquisition of Hailey Bieber's Rhode skincare brand in a deal worth $1 billion, according to both companies. Rhode, Bieber's namesake skincare line, posted $212 million in net sales for the 12-month period ending March 31, 2023.
The brand, currently available exclusively online, plans to establish in-store partnerships with Sephora in North America and the U.K. by year's end. Bieber, 28, a model and wife of singer Justin Bieber, will hold the roles of Rhode's chief creative officer, head of innovation, and strategic adviser to the combined companies.
Launched in June 2022, the brand has since expanded its product offerings to include blushes, colored lip balms, and lip liners. Rhode appeals to young consumers and fans of Bieber's fresh-faced, casual aesthetic, providing a contemporary alternative to the ultra-glamorous, heavily made-up looks favored by Kim Kardashian a decade ago.
Under the agreement, E.l.f. will pay $600 million in cash and issue $200 million in new shares of E.l.f. Beauty common stock. The deal also includes a potential payment of $200 million based on the brand's future growth over the next three years.
E.l.f., which stands for "eyes, lips, and face," originated as an affordable makeup brand in 2004, selling products online initially. It later expanded into retail stores, including Target, and saw growth fueled by social media trends emphasizing less expensive alternatives to high-end products.
Reporting $1.3 billion in net global sales for the fiscal year ending March 2023, E.l.f. is known for its vegan and cruelty-free products, much like Rhode. Both brands capitalize their first letters, opting for a unique styling choice.
The company withstood the impact of tariffs during this period, with most of its products sourced from China. Despite announcing a $1 price increase slated to take effect August 1, the brand acknowledged it was keeping an eye on the evolving tariff situation.
As part of its growth strategy following the acquisition, Rhode will look to expand its creator community, reduce its reliance on celebrity influence, and deepen its global retail presence. The integration with E.l.f. Beauty is expected to enhance Rhode's presence within the beauty industry and provide additional resources for future growth.
- The acquisition of Hailey Bieber's Rhode skincare brand by E.l.f. Beauty showcases a significant move in the business world, as the deal is valued at $1 billion.
- In a strategic move to increase its presence, Rhode, the popular skincare brand, plans to establish in-store partnerships with Sephora in North America and the U.K. by the end of this year.
- E.l.f. Beauty's acquisition of Rhode is not only a financial business deal, but also a strategic move in the fashion-and-beauty industry, as both brands share vegan and cruelty-free values.
- With the integration of Rhode into E.l.f. Beauty, the skincare brand aims to expand its creator community, reduce its reliance on celebrity influence, and deepen its global retail presence, thereby enhancing its position within the beauty industry.
