Hailey Bieber sells makeup brand Rhode to Elf Beauty in $1B deal

Model Hailey Bieber’s makeup and skincare brand, Rhode, is being snapped up by Elf Beauty for about $1 billion, giving the budget cosmetic retailer access to a celebrity-endorsed product line that has become hugely popular among Gen Z and millennials.Elf said on Wednesday it would pay Rhode shareholders $800 million in a combination of cash and stock and an additional potential earnout consideration of $200 million subject to certain performance-related conditions.Last month, Reuters reported that Bieber was exploring a sale of the brand, which could be worth more than $1 billion.For Elf, the deal would mark a shift in strategy and expand into the prestige beauty market as the company faces weak demand from mass market customers who are being pressured by persistent high inflation.“The Rhode deal is a bold move for e.l.f.into premium beauty at a time when the prestige side of the industry has lost some of its momentum as a result of consumers buying less or trading down,” said Sky Canaves, eMarketer analyst.However, Rhode has bucked this trend, Canaves added, with a strong Gen Z following and significant buzz around its product launches, positioning it well for a strong expansion.Elf — short for eyes, lips and face — offers products priced as low as $2 at US retailers including Walmart, Ulta Beauty and Target.On the other hand, Rhode — which launched in 2022 and gained popularity with TikTok viral products such as its $18 “peptide lip treatments” — sells exclusively through its own website or pop-up stores, relying heavily on Hailey Bieber’s social media influence.“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,” Bieber said.The company raked in about $212 million in sales for the year ended March 31 and is planning to start selling at Sephora stores across the US and Canada coming this fall, fol...