Cosmetics giant E.l.f. Beauty plans to acquire skincare brand Rhode, founded by Hailey Bieber, for a whopping $1 billion.
E.l.f. Beauty Acquires Hailey Bieber's Beauty Brand Rhode for $1 Billion
In a significant move, E.l.f. Beauty has announced the acquisition of Hailey Bieber's skincare brand, Rhode, for $1 billion. The purchase, subject to standard closing conditions, is expected to be completed in E.l.f.'s Q2 of fiscal 2026.
The deal consists of an initial payment of $800 million at closing, with an additional $200 million contingent on Rhode's performance over the next three years. E.l.f. Beauty plans to finance this through a mix of committed debt financing worth $600 million and the issuance of $200 million in new shares.
The announcement follows the release of E.l.f.'s fourth-quarter earnings for fiscal 2025, showing a 4% increase in net sales for the quarter to almost $333 million and a 28% yearly growth to reach $1.3 billion. This marks the 25th consecutive quarter of net sales growth and market share gains for the brand.
Two years ago, E.l.f. Beauty acquired skin care brand Naturium. The company's strategy, as stated by CEO Tarang Amin, is to only pursue acquisitions that align with their high growth rate, providing a 'win-win force multiplier'. The acquisition of Naturium allowed E.l.f. to expand its retail presence, adding Ulta Beauty, Boots U.K., and Shoppers Drug Mart to its network. Bieber will follow a similar path, serving as the brand's chief creative officer, head of innovation, and strategic advisor for both Rhode and E.l.f. Beauty. The co-founders and CEO of Rhode will continue to manage the brand, based in Los Angeles.
Rhode will be launching in all Sephora U.S. and Canada stores this fall and in the U.K. by the end of the year. E.l.f. Beauty intends to further broaden Rhode's distribution network through its existing retail partnerships. Rhode's unique aesthetic and lifestyle approach to beauty has driven its success and scale across multiple product categories, including cosmetics, skincare, and accessories. Despite launching only in 2022, Rhode reported net sales of $212 million over the last 12 months, with only 10 products in its assortment.
Amin expressed confidence in Rhode's market potential, given Bieber's reputation as a thoughtful founder beyond just a celebrity status. E.l.f. Beauty already owns two of the fast-growing mass skin care brands – E.l.f. Skin and Naturium – and Rhode serves as an additional entry point into the skincare market and other beauty categories. Rhode's prestige market positioning also opens new opportunities for E.l.f. Beauty.
The company will invest further in marketing Rhode to boost brand awareness, improve digital capabilities, and expand its product offerings over time. Amin highlighted the benefits of learning from each other, with cross-branded improvements evident following the acquisition of Naturium and its positive impact on E.l.f. Skin.
Due to potential tariff-related outcomes, E.l.f. Beauty is not providing guidance for the upcoming fiscal year. To mitigate its impact, the company will increase prices by $1 for all SKUs and brands across the globe, starting August 1st. This price hike marks the third in E.l.f.'s 21-year history.
- The acquisition of Hailey Bieber's skincare brand Rhode by E.l.f. Beauty signifies a significant move in the fashion-and-beauty business.
- E.l.f. Beauty plans to finance the $1 billion acquisition through debt financing and the issuance of new shares, demonstrating its commitment to business growth.
- Rhode's unique aesthetic and lifestyle approach to beauty has driven its success, with net sales of $212 million over the last 12 months despite launching only in 2022.
- E.l.f. Beauty aims to broaden Rhode's distribution network through existing retail partnerships and plans to invest further in marketing to boost brand awareness.
- The acquisition of Rhode serves as an additional entry point for E.l.f. Beauty into the skincare market and other beauty categories, further expanding its business portfolio.
- The co-founders and CEO of Rhode will continue to manage the brand, based in Los Angeles, while Hailey Bieber will serve as the brand's chief creative officer, head of innovation, and strategic advisor for both Rhode and E.l.f. Beauty.
- The price hike marks the third in E.l.f.'s 21-year history and is a response to potential tariff-related outcomes, with E.l.f. Beauty not providing guidance for the upcoming fiscal year. This move indicates a focus on finance and entrepreneurship to maintain profitability in the face of economic challenges.
