Latest news with #E.l.f.
Yahoo
a day ago
- Business
- Yahoo
E.l.f. Beauty to Acquire Hailey Bieber's Rhode in $1 Billion Deal
Beauty has a new billion-dollar baby: Hailey Bieber. E.l.f. Beauty has reached an agreement to acquire Bieber's beauty brand Rhode in a deal valuing it at $1 billion, the companies jointly revealed Wednesday. More from WWD The TikTok Shop Opportunity, Defined by Joey Shamah and Stormi Steele Foot Locker Stock Soars More Than 80% as Dick's Sporting Goods Confirms $2.4 Billion Buyout Church & Dwight Acquires Touchland for Up to $880 Million The news comes just a month after WWD reported that Rhode had hired JP Morgan and Moelis to explore deal options. 'They support founders, they want to help push the founders' vision and get behind them,' Bieber said of the deal with E.l.f. in an interview with WWD. 'That's where we are with Rhode, and I'm ready to get to the next place.' That will include international expansion — or, as Bieber put it, 'more places, more faces.' It's not E.l.f.'s first rodeo with founder-led brands: The company acquired Naturium in 2023 and incubated in-house Alicia Keys' Keys Soulcare, a fact that was attractive to Bieber. 'This is my baby, and to find a home for it is really not an easy process — it's very scary,' Bieber said. 'When I met the E.l.f. team, we had a lot of similarities when it came to the importance of community and team building.' The deal marks E.l.f.'s biggest to date, and consists of $800 million in cash and stock payable at closing, and an additional potential earnout consideration of $200 million based on the future growth of the brand over a three-year timeframe. To fund the deal, E.l.f. secured $600 million in debt financing. It also comes at a time when E.l.f., which was one of the top-performing companies on the New York Stock Exchange in the first half of last year and surpassed the significant $1 billion milestone in net sales, has faced headwinds recently. These are namely in the form of tariffs, with 75 percent of its products manufactured in China. As a result, the company's share price is down by around 25 percent in the year to date. In an interview, E.l.f. chairman and chief executive officer Tarang Amin revealed that he had been in discussions with Rhode since October. 'E.l.f. Beauty is on fire, and it was a desire to fuel that fire with the acquisition of Rhode,' he said. 'In less than three years, going from zero to $212 million of net sales, direct-to-consumer only, with just 10 products — I would never believe that if somebody told me,' he said. 'The momentum and everything that Hailey has fits our ethos as a company, of wanting to invite her into our family and her entire team and be able to transform the beauty industry.' Building on Bieber's popular glazed doughnut skin content on Instagram, Rhode launched in 2022 with a tightly edited stock keeping unit count on its website. By the end of 2024, it was the top skin care brand by earned media value, having grown 367 percent from the year prior. Since its launch, Rhode has expanded beyond the initial lip balms, serum and moisturizer to entail color cosmetics, phone cases and a recently confirmed partnership with Sephora in North America, which will kick off later in 2025. The brand's net sales reached $212 million in the 12 months ended March 31. The acquisition gives E.l.f. more than just a fast-growing buzzy brand: It will also mark E.l.f.'s entrée into Sephora U.S. 'Going to every single U.S. and Canadian store this fall, followed by the U.K. by the end of the year, shows the confidence [Sephora] has,' Amin said of the launch. 'They are great purveyors, and every beauty brand wants to go to Sephora.' When Rhode initially hired bankers, sources were skeptical the $1 billion valuation could be met, citing broader factors in the M&A landscape as well as the brand's hefty marketing spend. Indeed, a raft of other brands — including Selena Gomez's Rare Beauty, Makeup by Mario, Kosas, Merit, Jane Iredale and more — have gone to market and have yet to find buyers. But Rhode bucked the trend, with one source noting it's the fastest majority deal of $1 billion or more in beauty. As part of the deal, Bieber will serve as Rhode's chief creative officer and head of innovation, overseeing creative, product innovation and marketing. She will also act as a strategic adviser to the combined companies. 'I want to continue to push innovation — innovative products, innovative marketing, and I know they'll be able to continue helping us,' Bieber said. Cofounders Michael D. Ratner and Lauren Ratner and CEO Nick Vlahos will continue to lead the brand out of its Los Angeles office. Amin also noted that every brand in the E.l.f. Beauty stable saw growth last year, with Naturium and Keys Soulcare sales reaching all-time highs. As for whether E.l.f. plans any more M&A, Amin stressed that his primary focus is the organic growth of its existing brand portfolio. 'A billion-dollar deal is the biggest we've ever done in our history, which talks about our excitement and our confidence, but also gives a big responsibility to make sure we're living up to everything Hailey wants and so I'd say that's going to be the focus for us right now. How much can we grow our brand portfolio? How much can we just continue to disrupt the beauty industry?' he said. In August 2023, E.l.f. acquired masstige skin care brand Naturium from The Center for $333 million as a broader strategy to give the company cachet in skin. With that acquisition, it doubled its penetration within skin care to 20 percent and wasted no time in expanding Naturium's footprint into Ulta Beauty in the U.S. and Shopper's Drug Mart in Canada. In an interview with WWD last summer, Amin said: 'One of the things we get with acquisition is greater scale right away. What we get with something like a Naturium is they went from zero to over $90 million in sales in three years. We liked the fact that it already had a good sales basis and a fully developed team that we could continue to build. We've been investing in the brand, we've been investing in the team, and we continue to see incredible results from it.' The acquisition news comes as E.l.f.'s net sales increased 4 percent to $332.6 million in its fourth quarter ended March 31. This beat Wall Street's expectations of $327 million. Adjusted net income was $45.2 million. Adjusted diluted earnings per share were 78 cents, above estimates of 72 cents. Due to the wide range of potential outcomes related to tariffs, the company is not providing a fiscal 2026 financial outlook at this time. Amin noted that around 75 percent of E.l.f.'s goods are manufactured in China, while Rhode is primarily manufactured in Italy and South Korea. 'Just like every company, tariffs are impacting us, but we have a mitigation strategy,' he said. 'Last week, we announced to our community that we're going to take all E.l.f. prices up $1 and what we told them is it's a fraction of what the tariffs actually cost, but we really care about preserving great consumer value. We had 99 percent positive sentiment.' As for when the company is likely to release a full-year forecast, he said: 'As soon as we have resolution on where tariffs are going to head out, and we don't want to put up guidance, and then have something change.'
Miami Herald
a day ago
- Business
- Miami Herald
Low-cost beauty brand to raise prices due to tariffs, inflation
For many consumers, cosmetics blur the line between a want and a need. Case in point: I want to wear lipstick. Do I need a dozen shades of pink and red lipstick? Well… yes. Wearing makeup - and having plenty of options in my makeup bag - makes me look and feel better, even if I'm just working from home. (Hey, I like to be prepared for video calls.) Judging by the global revenue in the beauty and personal care market - projected to be $677.19 billion in 2025, per Statista - I'm not alone in my "need" for a healthy stash of makeup and skincare products. Don't miss the move: Subscribe to TheStreet's free daily newsletter I'm also probably not alone in scaling back my beauty budget in the face of inflation. I've been averting my eyes from my inbox and text messages, which are loaded with promotions from my favorite brands. I've also been scoping out product dupes among traditionally lower-priced drugstore brands. Related: Struggling cosmetics brand sounds alarm, laying off thousands However, the recent announcement from a popular budget-friendly brand might mean it's time to refrain from drugstore "splurges," too. E.l.f. Cosmetics has forged a reputation as an affordable, yet high-quality makeup that's a hit with both drugstore and online consumers. But as inflation and tariffs loom, the company is raising its prices. The brand made the announcement last Friday on Instagram in true Gen Z speak. The caption reads: "Starting August 1, our prices are going up by $1.* Bringing you the best of beauty is getting more $$ but we're committed to keeping the quality high and prices We are keeping an on the tariff situation as it evolves." Now, $1 doesn't exactly sound like a wallet-buster. However, the percentage is the real eye-opener: a $2 product increasing to a $3 product represents a 50% increase. That's a big deal. The company says that even with the increase, 75% of its products will remain priced at $10 and below, like lip oil ($9), lip liner ($3), concealer ($8), and brow lift ($7). To be fair, you could fill up a makeup bag with all the basics and still have it cost less than, say, a tube of Chanel lipstick. But e.l.f. Cosmetics customers are not typically Chanel customers, and vice versa. It's the budget-minded consumers who will bear the brunt of the increase. And in light of other big E.l.f. news, some are not happy about it. Related: Kylie Cosmetics owner makes a harsh decision News of the price increase was overshadowed by even bigger news this week: E.l.f. acquired Hailey Bieber's Rhode in a $1 billion deal. On the Instagram post announcing the price increase, comments ranged from "We LOVE YOU" (@emuxly) to "I guess you need your customers to pay the 1 billion you spent on Rhode…" (@ Fair point. Premium brand users will still find E.l.f. products are cheap at twice or even three times the price, but those who rely on the budget brand as their beauty routine mainstay will take the hit. More Retail: Forget the Birkin bag, Hermès unveils something unexpectedCostco shares surprising pricing news as tariff pressures increaseStarbucks makes major change in rewards program loyal fans will hate The company attributes the price increase to the impact of tariffs and inflation. But a billion-dollar deal suggests that the company isn't exactly in economic danger. In fact, it indicates that E.l.f. is banking on a bright future with its Gen Z and now Gen Alpha customers. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
San Francisco Chronicle
a day ago
- Business
- San Francisco Chronicle
Oakland-based cosmetics company buys Hailey Bieber's Rhode brand for $1 billion
Oakland-based E.l.f. Beauty has purchased Hailey Bieber's skin care and makeup brand Rhode for $1 billion. Bieber, a model, entrepreneur and the wife of pop singer Justin Bieber, started the casual beauty brand in 2022. 'I always had big dreams for the company, and the most important thing to me is to keep bringing (Rhode) to more spaces, places, and faces globally,' the social media mogul wrote in an Instagram post Wednesday, May 28, while announcing the deal. 'I found a like-minded disruptor with a vision to be a different kind of company that believes in big ideas and innovation in the same way that I do and will help us continue to grow the brand.' Bieber will now step into a larger role at the company, serving as its chief creative officer and head of innovation, in addition to acting as a strategic adviser to the combined companies. The acquisition is made up of $800 million in cash and stock and an additional $200 million payout dependent on Rhode's growth and performance over the next three years. E.l.f., created in 2004, is headquartered on 10th Street in Downtown Oakland, and its purchase of Rhode marks the company's largest to date. The East Bay company previously acquired skin care brand Naturium in 2023 for $355 million. E.l.f. reportedly praised Rhode's 'powerful engagement model' during its earnings call following the announcement on Wednesday, according to CNN, with CEO Tarang Amin noting that 'One of the things we really like about Rhode is just how tight the product assortment is.' Bieber launched Rhode, which is her middle name, as a skin care line but has since expanded to include an array of makeup products including blushes, lip balms and lip liners. There are currently 10 products available. Rhode made $212 million in net sales in its last fiscal year, which ended in March, gaining popularity among younger consumers in particular. Previously only available online and during rare in-person pop-ups, the brand announced earlier this year that products would be hitting the shelves of Sephora in North America and the United Kingdom soon. News of the acquisition comes as her husband is rumored to be on the verge of 'financial collapse' after having to sell his music catalog in December 2022, according to a TMZ documentary, 'TMZ Investigates: What Happened to Justin Bieber?' Available on Hulu, the film alleges that Bieber's financial troubles began when he was plunged into debt for pulling out of his 'Justice' world tour in 2022.
Indianapolis Star
a day ago
- Business
- Indianapolis Star
Amazon's Memorial Day sale ends tonight: Shop last-chance deals on power tools, vacuums
Amazon's Memorial Day sale is wrapping up today, May 29! With it being the last day to grab these deals, this marks your absolute last chance to take advantage of these incredible, low prices on a huge selection of products, from tools to beauty products and even appliances. With just a few hours remaining before these discounts vanish into thin air, we've curated a list featuring some of the best-selling Amazon deals that shoppers are snatching up. Trust us, you won't want to miss out on these savings, so make sure to grab them now before they're gone for good! More: Amazon's Memorial Day sale has up to 85% off outdoor tools, beauty and tech More: E.l.f. acquires Hailey Bieber's Rhode Skincare: 5 must-try products More: Gear up for Father's Day with the ultimate DICK'S Sporting Goods gift guide
USA Today
a day ago
- Business
- USA Today
Amazon's Memorial Day sale ends tonight: Shop last-chance deals on power tools, vacuums
Amazon's Memorial Day sale ends tonight: Shop last-chance deals on power tools, vacuums It's your last call for these savings! Amazon's Memorial Day sale is wrapping up today, May 29! With it being the last day to grab these deals, this marks your absolute last chance to take advantage of these incredible, low prices on a huge selection of products, from tools to beauty products and even appliances. With just a few hours remaining before these discounts vanish into thin air, we've curated a list featuring some of the best-selling Amazon deals that shoppers are snatching up. Trust us, you won't want to miss out on these savings, so make sure to grab them now before they're gone for good! Don't miss these last-chance Amazon Memorial Day deals More: Amazon's Memorial Day sale has up to 85% off outdoor tools, beauty and tech More: E.l.f. acquires Hailey Bieber's Rhode Skincare: 5 must-try products More: Gear up for Father's Day with the ultimate DICK'S Sporting Goods gift guide More: 🍕 Everyone wants a pizza oven lately: Save $200 on the hottest Gozney Memorial Day deals
