This week, I checked in with industry insiders to better understand E.l.f. Beauty’s acquisition of Hailey Bieber’s Rhode — a $1 billion cash and stock deal announced on Wednesday — including what it signals for M&A this year. Additionally, Unilever opens a new headquarters in New Jersey, Estée Lauder Companies has a new head of color cosmetics, and LVMH signals its stance on tariff-induced price increases.
What E.l.f. Beauty’s big bet on Rhode means for the beauty industry
Announced on Wednesday, E.l.f. Beauty’s $1 billion cash-and-stock acquisition of Hailey Bieber’s Rhode has sent shockwaves through the beauty industry as its slow M&A landscape heats up.
“It shows heat and energy coming back into beauty in very specific ways,” Brit Starr, CMO of CreatorIQ, a platform that tracks digital performance across the global creator economy, told Glossy. “It also reasserts what we know to be true: These indie brands that are really built with, by and around creators can achieve rapid value at a pace that is unheard of.”
Rhode was launched by Hailey Bieber in 2022 alongside co-founders Lauren Ratner and husband Michael D. Ratner. The line includes moisturizers, lip balms and color cosmetics that sell direct-to-consumer for $18-$38. The brand reached $212 million in net sales in the 12 months ending March 31 and announced its foray into retail on May 20 with a forthcoming Sephora launch.
As previously reported by Glossy, the deal was announced ahead of E.l.f.’s quarterly earnings call on Wednesday where it also announced a 4% increase in net sales to reach $3.32 billion for its Q4 2025.
“This specific acquisition is a signal that there is more than one type of exit,” Starr said. That is, Bieber won’t simply walk away with her new riches: She will stay on in a key role with a fifth of the acquisition payout tied to her continued performance over the next three years.
The deal is a mix of $600 million in cash, $200 million in E.l.f. stock and the potential for a $200 million earnout over the next three years reliant on the success of the business. Bieber will stay on as chief creative officer and head of innovation.
“If you actually look at the E.l.f. market cap, that makes Bieber a 3% minority owner in E.l.f.,” said Oleg Isakov, a principal in business consultation firm Kearney’s consumer practice and co-author of its latest report on beauty’s M&A opportunity. “If you think about the growth trajectory that both companies can have together by, for example, acquiring new companies and growing to the size of a Lauder or L’Oréal, that could be another billion for Bieber easily, right? It’s much more entrepreneurial than just a pure acquisition where the founders then basically disappear.”
Deal negotiations reportedly began in October, and E.l.f. secured $600 million in debt financing to power the purchase.
The value of the deal boils down to three main attributes, said Kearney’s Isakov. These include the masstige price tier, which he said will be less vulnerable to tariff-induced price hikes, thanks to bigger margins than mass and value brands; a runway for growth, thanks to limited distribution and a small product lineup of just 10 SKUs; and the power of Bieber herself.
The deal also gives E.l.f. Beauty its first access to Sephora and a lengthy runway for an increase in Rhode’s awareness. Data from Tubular Labs, a data collection agency focused on social video content, found that Hailey Bieber and Rhode have a 30% audience overlap on TikTok, which drops to a 10% and 9% audience overlap with E.l.f.
Rhode has also underindexed in paid partnerships, such as content creator or influencer promotion, launching only seven in 2025, two in 2024 and four in 2023, according to the firm. This is juxtaposed against E.l.f.’s 119 cross-platform collabs in 2025, 260 in 2024 and 218 in 2023.
Similar to Touchland’s recent $700 million acquisition by CPG firm Church & Dwight, Kearney’s Isakov anticipates forthcoming acquisitions to be made by newer, younger conglomerates like E.l.f. and C&D as legacy companies like Estée Lauder and Shiseido struggle amid changing geo-political conditions.
Rhode has not yet expanded internationally, which is also attractive to buyers, Glossy’s experts said. That allows E.l.f. to build a future-proofed supply chain instead of rebuilding one to better suit the quick changes happening under the current administration, like tariffs.
Rhode’s limited distribution has, in effect, “insulated them” from current issues plaguing legacy bands, Isakov said.
Within Kearney’s latest report, the firm highlights the top beauty brands most likely to be next acquired. These include skin-care brands Augustinus Bader, Versed, Drunk Elephant, Biologique Recherche and La Prairie. For makeup, they include Makeup by Mario, Westman Atelier, Rare Beauty, Kosas and Too Faced. For fragrance, the firm is watching Xerjoff, Boy Smells, Nishane, Dossier and Perfumer H, while hair includes Olaplex, Gisou, Madison Reed, Aveda and IGK.
E.l.f. purchased the skin-care company Naturium from influencer Susan Yara in 2023 for $355 million in cash and stock, and it incubated Alicia Keys’s skin-care line, Keys Soulcare, beginning in 2020.
The experts Glossy spoke to all agree that, regardless of the future of this deal, it marks a shift in how M&A may look in the coming quarters.
“This is not a large, faceless conglomerate acquiring a very popular brand; this is El.f., with a very defined brand identity, doing so,” said Alex Rawitz, CreatorIQ’s director of research and insights. “There’s a mutual benefit in many respects of the deal, with E.l.f. leveraging its more established status in Europe and Rhode serving as that path into Sephora and that path to that Gen-Alpha audience. Those will be two major points of activity to look at in the coming months as the brands figure out how to align their strategies and what they’re going to be moving forward with.”
Executive moves:
- Lisa Sequino is the new head of color cosmetics for Estée Lauder Companies. In her new role, president of makeup brand cluster, she will oversee the strategic direction and global growth of the company’s portfolio of makeup brands including MAC, Bobbi Brown, Too Faced and Smashbox. She was previously the CEO of Blackstone-owned sunscreen company Supergoop!.
News to know:
- It appears LVMH will not be raising prices on its beauty selection due to tariffs. On Wednesday, LVMH deputy CEO Stephane Bianchi told members of the French Parliament that it had the ability to raise prices on its luxury fashion and jewelry by 2-3% without impacting sales, according to reporting by Reuters. However, he noted that this price elasticity was not present for its beauty and cognac offerings, which could be hurt with a price increase. LVMH owns Fenty, Fresh, Benefit, Marc Jacobs and Sephora, among others.
- Beauty VC True Beauty Ventures has invested in Jupiter, a line of scalp-focused prestige hair care launched in 2020, for an undisclosed amount. The firm has also invested in K-18, Crown Affair, Caliray and more brands.
- Unilever is set to open its new U.S. headquarters on June 5 in Hoboken, New Jersey at the Waterfront Corporate Center, which also houses offices for Walmart and Newell Brands. The new 111,000-square-foot location will replace the company’s former headquarters in Englewood Cliffs, which it opened in 2018.
- Gym amenities are increasingly important to consumers. On the heels of the Equinox and Kiehl’s breakup, SoulCycle has announced a fresh new amenities partner with Uni, a line of eco-minded body products from Australia. “Their products get results while pampering you, which our riders are going to love after leaving it all on the bike,” SoulCycle CEO Evelyn Webster said in a statement.
- Pamela Anderson has inked a deal with L’Oréal-owned Biolage hair care to be the brand’s first global ambassador. It also marks Anderson’s first hair campaign. “Who would’ve thought at this age, I’d be in this industry, in the beauty world, and just kind of starting my career? There’s hope for all of us,” Anderson told People Magazine.
- Bath & Body Works beat analyst predictions for its 2025 Q1 earnings, announced Thursday, with a 3% year-over-year net sales increase to reach $1.4 billion for the quarter.
Stat of the week:
Glossy’s first-quarter 2025 survey of marketing professionals found that display ads were marketers’ second-most-used marketing channel as of Q1 2025, with social media taking first place. As previously reported, digital display ad spending in the U.S. totaled $74.3 billion in 2024, up 12% from the year prior.
In the headlines:
Chinese import activity resumes amid tariff rate drop. The winners and losers of Google’s AI Mode. Temu and Shein surge across Europe as US growth slows amid tariff pressure. Ad spend rebounds in Q2, but publishers brace for a murky second half. Peak performer or workaholic? Why HR leaders need to watch out for hyper-productive employees.
Listen in:
Marie du Petit Thouars and Matthew Berkson, the married duo behind fragrance brand Maison Louis Marie, join the Glossy Beauty Podcast to discuss its slow and steady growth since its 2012 launch.
Need a Glossy recap?
L.A. retail leader Rick Caruso unveils post-wildfire reopening plan, new Elyse Walker Palisades location. Kiehl’s taps Brittany Cartwright to hard launch its new fitness relationship. Inside Laneige’s food- and beverage-based ‘sensorial marketing’ strategy. The unexpected comeback of Emporio Armani’s Stronger With You, with help from #PerfumeTok. Inside Lancôme’s plan to own the lip gloss category.
