Beauty's Hottest New Trend: The Founder Buyback

Business of Fashion

04-06-2025

On Tuesday, influencer-turned-mogul Huda Kattan announced that she had regained majority ownership of her eponymous makeup brand, Huda Beauty, after buying back the minority stake private equity firm TSG Consumer Partners took in 2017, The Business of Beauty reported. The news arrived months after Kattan's sister Mona Kattan purchased Kayali, the fragrance brand she co-founded, alongside PE firm General Atlantic; that transaction set up funding for Huda Beauty's buyback. It was a sister act of multimillion dollar proportions.
After last week's billion dollar acquisition of Rhode by E.l.f. Beauty and Church & Dwight's $700 million purchase of hand sanitiser label Touchland, the 2025 M&A beauty market appears to be looking up.
But the arc of Huda Beauty traces along a bigger shift in the beauty industry. When the brand launched in 2013, it did so in the heat of the celebrity makeup moment; Kylie Jenner's pigmented lip kits and Rihanna's 40-shades of foundation came next. Billion dollar valuations followed for an elite set that included Kattan, Jenner and makeup artists like Anastasia Soare, Charlotte Tilbury and Pat McGrath. In the years since, some have seen their businesses flourish (see: Puig's majority acquisition of Charlotte Tilbury, valued at $1.2 billion) while others have lost their grip.
In the decade since Huda Beauty's debut, a shiny new class of celebrity founders, like Bieber's Rhode and Selena Gomez's Rare Beauty, have risen to the vanguard, succeeding with direct customer relationships and outsize sales, strong operational teams and a simple but refined focus on exactly what they do well. A following is no longer enough in the cut-throat beauty business, unless you can continuously convert them to shoppers. The Social Network
What does Kattan have? In addition to an estimated $450 million in annual sales as of 2024, the brand benefits from a wide international distribution and a wide array of best-sellers. But its most impressive feat may be that, despite 12 years in business — 120 years in beauty — Kattan hasn't lost her relevance online. Huda Beauty's best asset is Huda herself.
As a vlogger, the US-born and Dubai-based Kattan was perhaps something of the original beauty influencer. Her own line, which she founded with her sisters Mona and Alya, was an instant hit, as her high-definition makeup looks (fluffy lashes, sleek contours) and a critic's eye toward formulas translated seamlessly into a cosmetic range that still mints regular hits, like last year's Easy Blur airbrush foundation.
In 2014, four years after Instagram launched, Kattan hit 1 million followers; three years later, she had 18 million, and has 57 million today, according to the app. RivalIQ calculated that @hudabeauty's engagement rate is eight times the going average for beauty brands. If Kattan's public support of Palestinians in the Gaza war has polarised some of her audience, the tens of thousands of comments her posts draw seem only to strengthen her reach.
Trends like the clean girl aesthetic and 'Euphoria' makeup may have come and gone, but Kattan's influence still powers Huda Beauty the brand; it consistently outranks others when it comes to social media performance. It was the #4 top ranked makeup brand in 2024, beating out LVMH's Dior and Fenty, said Launchmetrics. In the first quarter 2025, it was the top of CreatorIQ's list, narrowly besting Selena Gomez' Rare Beauty. Spate analyst Mathilde Riba reported that Huda Beauty charts nearly a 7 out of 10 on the firm's 'sentiment index.' Buyback to Bounce Back
As a Revlon makeup artist living in opulent Dubai, Kattan's ultra-glam look hooked a generation of beauty obsessives on her cosmetics almost immediately. But two subsequent skincare forays, Wishful (launched in 2020) and Glowish (in 2021) were less successful, and ultimately didn't satisfy customers who had fallen for Kattan's contours and cut creases. The lines were eventually phased out of Sephora, and now linger on the line's e-commerce website.
Kattan heads into the next phase 'hyper-focused' on Huda Beauty, she told Women's Wear Daily — an easier task without the distractions of the fragrance and skincare businesses.
But the founder-led buyback can be tricky: French conglomerate Coty took a $71 million loss when it sold its stake in skincare brand Skkn back to founder Kim Kardashian three years after its purchase. And the clean label Beautycounter, which founder Gregg Renfrew bought out of bankruptcy last year, has taken time to reposition itself ahead of a relaunch scheduled for this summer.
Huda Beauty and TSG may not have had the fairytale exit that Charlotte Tilbury scored with Puig, but given the glut of colour cosmetics brands currently in market, maybe it was the best outcome. The San Francisco-based TSG Consumer Partners, is known to be more of a short-term investor; the firm took a minority stake in It Cosmetics in 2012, cashing out in 2016 when the brand sold to L'Oréal for $1.2 billion. It made a similar manoeuvre with E.l.f., in which it bought a minority stake in 2011 that grew to a majority stake by 2014, two years before the line's IPO. More recently, it announced a 'strategic growth investment' in Marianna Hewitt and Lauren Ireland''s Summer Fridays, implying that influencer-fronted brands still have bright futures ahead.
And what of the fierce competition?
As more and more beauty brands come to market and also languish in the M&A waiting room, they'd be wise to stay close to their core. That's the thing about a once-in-a-lifetime founder: There's only one person who can see the vision through. Otherwise, they have to let it go.
With additional reporting by Priya Rao.
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