Hailey Bieber’s beauty brand rhode sold to budget makeup powerhouse e.l.f. Beauty for $1 billion on Wednesday.
It’s e.l.f.’s largest acquisition to date, eclipsing its $355 million purchase of skin care brand Naturium in 2023.
Founded in 2022 along with Michael D. and Lauren Ratner, Bieber’s brand racked up $212 million in net sales in its last fiscal year, which ended in March. And earlier this year, rhode announced that its products will be seen in-stores at Sephoras in North America and the United Kingdom.
Bieber will serve as rhode’s chief creative officer and head of innovation, the company said. She’s the company’s founder and current creative director.
With a strong social media presence, in addition to Bieber’s own digital footprint both before and after her marriage to singer Justin Bieber, rhode “has a powerful engagement model,” e.l.f. said in its earnings call just after the announcement Wednesday. Fans will often wait hours in line for rhode pop-ups, and its products are frequently sold out on its website.
“One of the things we really like about rhode is just how tight the product assortment is. It’s only 10 products across skincare, color cosmetics and accessories,” CEO Tarang Amin said in the same earnings call.
E.l.f., meanwhile, dominates the skincare and makeup market for young consumers and is teens’ top cosmetic brand, according to a survey from investment firm Piper Sandler. The company said it could help rhode expand into retail and increase its global footprint.
The massive acquisition comes as e.l.f. is at a crossroads with President Donald Trump’s chaotic tariff war with China. As of mid-May, about 75% of its global production came from China and is now subject to tariffs of 55%, including the tariffs put in place in 2019, the company said in its Wednesday earnings.
E.l.f. is increasing prices by $1 across its entire portfolio on August 1 in response to tariffs, the company said on its Instagram account. “Not gonna lie, inflation and tariffs are hitting us hard,” read the post, which featured images of its cosmetics with googly eyes edited onto them.
“We wanted to be transparent to our community that we do have to take some pricing as part of our plan to mitigate this, and the overwhelming response is positive,” CEO Tarang Amin said in an interview with CNN Friday.
E.l.f. also did not issue guidance for this fiscal year because of uncertainty around tariffs. At the same time, e.l.f was enjoying rapid growth – the company’s sales still grew 28% in the fiscal year ending March.
But it is still sticking by its production model.
“We believe our unique China-based supply chain is an area of competitive advantage we’ve been honing for the past 21 years… (We) are committed to our China team and suppliers,” the company said in its Wednesday earnings call.
Amin told CNN its international unit is the fastest growing part of its business, up 60% in the past year, and isn’t subject to tariffs.
“We spent 20 years honing what we believe is the best supply chain in the world,” Amin said. “So it’s not as simple as just moving it.”
The rhode deal consists of $800 million in cash and stock, and potentially another $200 million based on how rhode performs over the next three years. It’s expected to close later this year.
Source: edition.cnn.com
