Can Hailey Bieber Break Beauty's M&A Slowdown?
Can Hailey Bieber break the beauty M&A curse?
Sources have confirmed to WWD that her beauty brand Rhode has hired J.P. Morgan and Moelis to jointly explore deal options at a valuation of $1 billion, after a bevy of brands entered the market in the last year that never culminated in deals. Rhode's sales are understood to be around $200 million.
More from WWD
Unilever Snaps Up British Sustainable Deodorant Brand Wild
Inside Sephoria's Italian Debut
EXCLUSIVE: Wearable Breast Pump Company Willow Acquires Like-minded Femtech Company Elvie
Neither Rhode, J.P. Morgan nor Moelis could be reached for comment by press time.
News of the deal raised eyebrows among industry sources with knowledge of the brand's financials.
One industry source said that while the target would be a strategic buyer, that could be difficult given that the business is currently all online, despite speculation that it is gearing up to go with a retailer.
'They're too risk-averse, particularly in this environment,' another source said of potential strategic buyers. 'The market is just too uncertain to write that big of a check.'
Even if Rhode does soon reveal an exclusive partnership with a major retailer, investors are jittery about acquiring brands tied to one celebrity and one retailer, as it is often believed to be a risky strategy, multiple sources said.
The news comes at a time when significant transactions have been few and far between. Among the brands that reportedly came to market in the last 12 months but are yet to score a deal are Rare Beauty, Makeup by Mario, Merit, Kosas, Byoma and Jane Iredale, among others.
'Nobody paid $1 billion for Rare Beauty, nobody paid $1 billion for Makeup by Mario,' said one source, citing the lagging M&A market and broader economic pressures. 'Why would they pay that for Rhode? It doesn't even have distribution.'
While one source posited that it would make sense for acquirers to snap up the brand before it enters retail — and then reap the rewards as owners — broader market trends point away from that scenario.
'The brand has approached the scale where the universe of potential buyers is getting smaller and smaller,' said the source. 'And [Makeup by Mario, Rare Beauty and Rhode] are too young, too big, too dependent on their founders — there's too much risk. The buyers that are relevant are exactly the buyers that wouldn't touch this.'
Skin care, which Rhode launched with before expanding into color cosmetics and accessories, is also seeing a slowdown in the U.S., though Rhode falls in the 'masstige' price range that is still growing, as reported.
And though Rhode is understood to be lining up specialty retail partnerships in key markets globally (speculation has swirled for months about an impending deal with Sephora in North America), the logistics alone could hamper brand leadership.
'It's not just shipping products to Sephora or flying Hailey around. People think getting into Sephora is a big win, but can they support that?' one source said.
Despite the marketing prowess of Rhode's founder, both potential buyers and retail partners are beginning to see social media savvy as a con, not a pro.
'Brands are being told to dial that back,' said a source. 'Don't get hooked on virality, because you can't anniversary those sales numbers. That's not viewed favorably. It drives traffic, sure, but you don't want massive spikes.'
Rhode also pumps money into marketing beyond the fame of Bieber, tapping talent for campaigns ranging from Claudia Schiffer and Paloma Elsesser to Matilda Djerf.
Despite that, the business is assumed to be profitable, with one source estimating the cost of goods at around 15 percent and referencing the brand's ownership of its own margins, since it sells directly.
'That would give Hailey about $170 million to spend on marketing, people and logistics,' the source hypothesized. 'It's a lot of dollars to play with. My guess is she's profitable and, by the way, if she's not, then they're definitely not getting this deal done.'
On the bright side, the market has begun to thaw for smaller deals. Skims, Kim Kardashian's shapewear and apparel company, has acquired Skkn by Kim from Kim Kardashian and Coty Inc.
Coty acquired 20 percent of KKW Beauty for $200 million in 2021. Now that stake will belong to Skims, while Kardashian's 80 percent holding will also be transferred to Skims.
Unilever also acquired British sustainable deodorant brand Wild. While it did not reveal the price paid, it has been reported that it sold for 230 million pounds.
Best of WWD
How Grooming Is Introducing Men to Self-care and Redefining Masculinity
Clean Beauty Brand Ignae Makes Big U.S. Push With a New Look
War Paint for Men Opens First Store in London's Carnaby Street

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Hamilton Spectator
20 minutes ago
- Hamilton Spectator
Man City signs Reijnders from AC Milan to complete $150M spending spree
Manchester City concluded a $150 million spending spree ahead of the Club World Cup by announcing the signing of Netherlands midfielder Tijjani Reijnders from AC Milan on Wednesday. The 26-year-old Reijnders moved for an initial fee of 55 million euros ($63 million) and is the second midfielder — after France playmaker Rayan Cherki — to join City in the special June 1-10 transfer window created to allow sides in the 32-team Club World Cup to reshape their squads. City paid Lyon $41 million for Cherki and also signed Algeria left back Rayan Aït-Nouri from Wolverhampton for $42 million. After deciding not to push to sign Florian Wirtz — the Germany playmaker is close to joining Liverpool, according to reports in the British media — City has spent around the same amount on three players. Add this latest splurge to an outlay of more than $200 million in the winter transfer window and City has already spent at least $350 million on players in 2025 to provide manager Pep Guardiola with a squad capable of reclaiming the Premier League title from Liverpool. Breakthrough season Reijnders has just been named as the best midfielder in Serie A after a breakthrough campaign in which he scored 15 goals and added five assists across all competitions for Milan, which endured a dismal season and failed to qualify for Europe. He joined Milan from AZ Alkmaar in 2023 for a fee of around 20 million euros (then $22.4 million) and recently signed a contract extension through to June 2030. That's the length of his contract at City, too. City is releasing De Bruyne to end his 10-year stint at the club and now has Reijnders and Cherki to link up with Rodri in an enticing midfield set-up. Reijnders said he was 'ecstatic' to be joining City. 'It is also a dream come true to play in the Premier League,' he said. 'This league has seen many of the best Dutch players perform through the years and it's an inspiration to follow in their footsteps.' City director of football Hugo Viana said Reijnders — who specializes in being a ball-carrying midfielder — will add 'extra energy, composure and creativity to our midfield.' City announced the transfer of Reijnders a day after the special transfer window closed but appears to have signed him in time for him to play in the new-look, 32-team Club World Cup, which starts on Saturday. City is in the same group as Juventus, Al Ain and Wydad Casablanca and its first match is on June 18. ___ AP soccer:
Yahoo
32 minutes ago
- Yahoo
RAYE Admits She Was ‘Scared' to Work With Mark Ronson Over Amy Winehouse Comparisons
RAYE has a pair of collaborations coming out with Mark Ronson, and the British singer nearly shied away from working with the esteemed producer due to his connection to the late Amy Winehouse, whom RAYE has drawn comparisons to. The first collab is titled 'Suzanne' and is slated to arrive on Friday. People caught up with RAYE backstage at Governors Ball in NYC over the weekend, where she opened up about her initial hesitancy to team up with Ronson, who predominantly produced Winehouse's final album, Back to Black, alongside Salaam Remi in 2006. More from Billboard RAYE Explains Why Covering Adele at the 2025 Oscars Was 'Terrifying' 'Democracy Forward' Compilation Features Tracks From Michael Stipe, Wilco, Brandi Carlile, John Prine and Tyler Childers Gracie Abrams Shares Snippet of New Music & Gets Support From an Excited Olivia Rodrigo 'Honestly, I'm not gonna lie, I actually was quite nervous and scared to work with him,' she admitted. 'I just do want to say that I know I can never, ever, ever, ever, ever attempt to replace or imitate Amy. I'm in awe of her. We all are, and we miss her.' RAYE continued: 'It's quite a tough thing to even allow myself to create so freely with him,' she says. 'But I really just wanted to be like, 'Do you know what? I just need to forget what anyone else is gonna say about this.' I absolutely love this producer. I've always wanted to work with this producer since I was a little girl.' Their second collaboration is set to be released later in June, with 'Grandma Calls the Boy Bad News' slated to land on the F1 soundtrack. 'We've made music together that I'm so proud of, and I love,' she gushed. 'I play it, and it makes me happy and joyful, so I'm proud.' The 'Escapism' singer's next album is starting to take shape, but she's stuck without a title for the project, which follows her acclaimed 2023 LP, My 21st Century Blues. 'I don't have an album title,' RAYE said. 'I'm like, 'What is it gonna be called?' It's stressing me out right now, I can't lie, because I've got the music starting to really come there. I just don't know what this album's gonna be called. In my humble opinion, My 21st Century Blues is such a fire album title, and I can't hand in an album title that's less good than that.' Best of Billboard Chart Rewind: In 1989, New Kids on the Block Were 'Hangin' Tough' at No. 1 Janet Jackson's Biggest Billboard Hot 100 Hits H.E.R. & Chris Brown 'Come Through' to No. 1 on Adult R&B Airplay Chart


San Francisco Chronicle
33 minutes ago
- San Francisco Chronicle
Man City signs Reijnders from AC Milan to complete $150M spending spree
Manchester City concluded a $150 million spending spree ahead of the Club World Cup by announcing the signing of Netherlands midfielder Tijjani Reijnders from AC Milan on Wednesday. The 26-year-old Reijnders moved for an initial fee of 55 million euros ($63 million) and is the second midfielder — after France playmaker Rayan Cherki — to join City in the special June 1-10 transfer window created to allow sides in the 32-team Club World Cup to reshape their squads. City paid Lyon $41 million for Cherki and also signed Algeria left back Rayan Aït-Nouri from Wolverhampton for $42 million. After deciding not to push to sign Florian Wirtz — the Germany playmaker is close to joining Liverpool, according to reports in the British media — City has spent around the same amount on three players. Add this latest splurge to an outlay of more than $200 million in the winter transfer window and City has already spent at least $350 million on players in 2025 to provide manager Pep Guardiola with a squad capable of reclaiming the Premier League title from Liverpool. Breakthrough season Reijnders has just been named as the best midfielder in Serie A after a breakthrough campaign in which he scored 15 goals and added five assists across all competitions for Milan, which endured a dismal season and failed to qualify for Europe. He joined Milan from AZ Alkmaar in 2023 for a fee of around 20 million euros (then $22.4 million) and recently signed a contract extension through to June 2030. That's the length of his contract at City, too. City is releasing De Bruyne to end his 10-year stint at the club and now has Reijnders and Cherki to link up with Rodri in an enticing midfield set-up. Reijnders said he was 'ecstatic' to be joining City. 'It is also a dream come true to play in the Premier League," he said. 'This league has seen many of the best Dutch players perform through the years and it's an inspiration to follow in their footsteps.' City director of football Hugo Viana said Reijnders — who specializes in being a ball-carrying midfielder — will add 'extra energy, composure and creativity to our midfield.' City announced the transfer of Reijnders a day after the special transfer window closed but appears to have signed him in time for him to play in the new-look, 32-team Club World Cup, which starts on Saturday. ___