Latest news with #US212
Sydney Morning Herald
7 days ago
- Business
- Sydney Morning Herald
Hailey Bieber's ‘glazed donut' is a $1.5 billion gamble
But Elf is paying a pretty polished price for Rhode, also known for its sleek, minimal packaging. The $US800 million in cash and stock payable at the close of the deal, expected before September, equates to 3.8 times Rhode's sales of $US212 million in the year to March 31, 2025. Including the additional $US200 million payable based on Rhode's performance over the next three years, the multiple is 4.7 times. The latter is in line with the lush deal multiple on L'Oreal SA's purchase of natural beauty label Aesop two years ago. To justify the price tag, Elf must ensure that its new addition doesn't run out of, well, Rhode. The narrow product range is the obvious starting point for expansion. Elf has rolled out a raft of innovations, appealing to its Gen Z buyers and turbocharging sales, so this avenue looks promising. There is also scope for Rhode to reach a wider range of customers. The brand is already due to launch in Sephora in the US, Canada and the UK this fall, a major milestone. Longer term, Elf could leverage its partnerships with other retailers — it is available in Ulta Beauty in the US for example, in Douglas in Italy and Boots in the UK — to maintain the momentum. Assuming Elf doubles sales over the next three to five years — which looks feasible — then the acquisition multiple would fall to a more reasonable level of about two times. Loading But there are risks to this trajectory, the most significant of which is Bieber herself. So far, she has bucked the broader boredom with celebrity-led brands. But her relevance must be sustained. Six years ago, Coty made a big bet on the Kardashians, paying $US600 million for a majority stake in Kylie Cosmetics, founded by Kylie Jenner. A year later, it spent $US200 million on a 20 per cent stake in Kim Kardashian's beauty business. The results have been mixed. While Kylie Cosmetics has increased sales by 1.5 times over the past two years, helped by launches of skincare and fragrance, Kardashian's underwear label Skims recently acquired Coty's shareholding, resulting in a $US71 million loss for the US-listed company. Bieber will join Elf as Rhode's chief creative officer and head of innovation. The new owner also has a strong track record of connecting with Gen Z via social media, through viral moments such as its tie-up with Chipotle Mexican Grill. And it has some experience managing celebrity and influencer involvement. It acquired Naturium, the skincare line created by influencer Susan Yara and beauty-brand accelerator The Center for $US355 million two years ago. It also developed Alicia Keys' brand. Even so, Rhode being so closely associated with its founder is a risk that must be managed. This isn't the only challenge. Lindsay Dutch, analyst at Bloomberg Intelligence, expects Elf's sales growth to slow this financial year following a frenetic pace of revenue expansion. The beauty boom is also fading, although Ulta said after the deal was announced that many consumers were turning to fragrance and body lotion as a comfort and escape from economic uncertainty. There's also the pressure from US President Donald's Trump's tariffs. Elf makes about 75 per cent of its products in China and will add $US1 to all its products globally on August 1 to reflect the levies. With so much to grapple with already, taking a big bet on a celebrity-backed brand looks a surprising diversion. But as any beauty enthusiast knows, there is always room for one more lipstick, particularly if it's a peptide-infused pout enhancer.
The Age
7 days ago
- Business
- The Age
Hailey Bieber's ‘glazed donut' is a $1.5 billion gamble
But Elf is paying a pretty polished price for Rhode, also known for its sleek, minimal packaging. The $US800 million in cash and stock payable at the close of the deal, expected before September, equates to 3.8 times Rhode's sales of $US212 million in the year to March 31, 2025. Including the additional $US200 million payable based on Rhode's performance over the next three years, the multiple is 4.7 times. The latter is in line with the lush deal multiple on L'Oreal SA's purchase of natural beauty label Aesop two years ago. To justify the price tag, Elf must ensure that its new addition doesn't run out of, well, Rhode. The narrow product range is the obvious starting point for expansion. Elf has rolled out a raft of innovations, appealing to its Gen Z buyers and turbocharging sales, so this avenue looks promising. There is also scope for Rhode to reach a wider range of customers. The brand is already due to launch in Sephora in the US, Canada and the UK this fall, a major milestone. Longer term, Elf could leverage its partnerships with other retailers — it is available in Ulta Beauty in the US for example, in Douglas in Italy and Boots in the UK — to maintain the momentum. Assuming Elf doubles sales over the next three to five years — which looks feasible — then the acquisition multiple would fall to a more reasonable level of about two times. Loading But there are risks to this trajectory, the most significant of which is Bieber herself. So far, she has bucked the broader boredom with celebrity-led brands. But her relevance must be sustained. Six years ago, Coty made a big bet on the Kardashians, paying $US600 million for a majority stake in Kylie Cosmetics, founded by Kylie Jenner. A year later, it spent $US200 million on a 20 per cent stake in Kim Kardashian's beauty business. The results have been mixed. While Kylie Cosmetics has increased sales by 1.5 times over the past two years, helped by launches of skincare and fragrance, Kardashian's underwear label Skims recently acquired Coty's shareholding, resulting in a $US71 million loss for the US-listed company. Bieber will join Elf as Rhode's chief creative officer and head of innovation. The new owner also has a strong track record of connecting with Gen Z via social media, through viral moments such as its tie-up with Chipotle Mexican Grill. And it has some experience managing celebrity and influencer involvement. It acquired Naturium, the skincare line created by influencer Susan Yara and beauty-brand accelerator The Center for $US355 million two years ago. It also developed Alicia Keys' brand. Even so, Rhode being so closely associated with its founder is a risk that must be managed. This isn't the only challenge. Lindsay Dutch, analyst at Bloomberg Intelligence, expects Elf's sales growth to slow this financial year following a frenetic pace of revenue expansion. The beauty boom is also fading, although Ulta said after the deal was announced that many consumers were turning to fragrance and body lotion as a comfort and escape from economic uncertainty. There's also the pressure from US President Donald's Trump's tariffs. Elf makes about 75 per cent of its products in China and will add $US1 to all its products globally on August 1 to reflect the levies. With so much to grapple with already, taking a big bet on a celebrity-backed brand looks a surprising diversion. But as any beauty enthusiast knows, there is always room for one more lipstick, particularly if it's a peptide-infused pout enhancer.
West Australian
29-05-2025
- Business
- West Australian
Justin Beiber's wife Hayleigh set for $US1 billion payday as skincare company subject of e.l.f takeover
e.l.f Beauty have announced plans to acquire Hailey Bieber's beauty brand Rhode in a deal worth up to $US1 billion as the cosmetics company looks to expand further into skincare. The acquisition – e.l.f.'s biggest ever, according to FactSet – is comprised of $800 million in cash and stock, plus an additional potential $200 million payout based on Rhode's performance over the next three years. The deal is expected to close in the second quarter of the company's fiscal 2026 — or later this year. 'I've been in the consumer space 34 years, and I've been blown away by seeing this brand over time. In less than three years, they've gone from zero to $US212 million in net sales, direct-to-consumer only, with only 10 products. I didn't think that was possible,' CEO Tarang Amin told CNBC in an interview. 'So that level of disruption definitely caught our attention.' In a news release, Bieber said she's excited to partner with e.l.f. to bring her brand to 'more faces, places, and spaces.' 'From day one, my vision for Rhode has been to make essential skin care and hybrid makeup you can use every day,' Ms Bieber said. 'Just three years into this journey, our partnership with 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.' e.l.f. shares dropped about 4 per cent in extended trading after the company announced the acquisition and released results for its fiscal fourth quarter. The company topped Wall Street's quarterly estimates, but did not offer guidance due to the Trump administration's changing tariff policy. e.l.f. gets a disproportionate amount of its products from China. Launched in 2022, Rhode has more than doubled its customer base over the past year and generated $US212 million in revenue in the 12 months ended March 31. The company's growth has primarily come through its website, but it plans to launch in Sephora stores throughout North America and the U.K. before the end of the year. As part of the acquisition, Bieber will serve as Rhode's chief creative officer and head of innovation, overseeing creative, product innovation and marketing. The brand was launched alongside two co-founders, Michael and Lauren Ratner, but it was Bieber's influence and name that turned it into a billion-dollar brand. Under her direction, Rhode last year became the No. 1 skincare brand in earned media value — or exposure through methods other than paid advertising — with 367 per cent year-over-year growth. Rhode is a solid match for e.l.f., which has seen growth skyrocket in recent years in large part to its digital prowess. The company has legions of online fans and is known for TikTok marketing that feels more natural to consumers. The company is also looking to dig deeper into skincare, which has become more popular with all age groups, particularly e.l.f's younger, core consumer. In 2023, it acquired skincare brand Naturium for $US355 million. Its acquisition of Rhode will allow it to build on its skincare growth and reach a higher income consumer. 'e.l.f. cosmetics is about $6.50 in its core entry price point, Rhode, on average, is in the high 20s, so I'd say it does bring us a different consumer set to the company overall, but the same approach in terms of how we engage and entertain them,' said Amin. The deal makes sense for e.l.f., and it was a competitive move to snag the brand before rivals did, but it comes at an uncertain and difficult time for the company. Even with expected price increases, China tariffs will likely reduce e.l.f.'s profits over time, and it's funding $US600 million of the deal with debt at a time of high interest rates. The acquisition is a bet that consumers will keep spending on high-end skincare, even during a potential economic slowdown or recession. e.l.f. made the announcement as it posted fiscal fourth quarter results, which beat Wall Street's expectations on the top and bottom lines. Here's how the beauty retailer performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG: Earnings per share: 78 cents adjusted v 72 cents expected Revenue: $US333 million v $328 million expected The company's reported net income for the three-month period that ended March 31 was $28.3 million, or 49 cents per share, compared with $US14.5 million, or 25 cents per share, a year earlier. Sales rose to $332.7 million, up about 4 per cent from $321.1 million. e.l.f.'s sales have increased rapidly in recent years, but investors have grown concerned as that growth started to slow and the threat of tariffs began weighing on its business. The company sources about 75 per cent of its products from China, which currently faces a 30 per cent duty on exports to the US Last week, it announced plans to raise prices by $US1 to offset higher costs from tariffs beginning on Aug. 1. While US duties on Chinese imports are 30 per cent now, that could change as President Donald Trump negotiates with Beijing. As a result, e.l.f. said it isn't providing a fiscal 2026 outlook 'due to the wide range of potential outcomes related to tariffs.' Amin said el.f. paid more than 145 per cent in duties before Trump agreed to slash the levies on Chinese goods, but those costs didn't come through during the quarter and will show up when the company reports its fiscal 2026 first-quarter earnings.
Perth Now
29-05-2025
- Business
- Perth Now
Why Hayleigh Bieber is set for a $1b payday
e.I.f Beauty have announced plans to acquire Hailey Bieber's beauty brand Rhode in a deal worth up to $US1 billion as the cosmetics company looks to expand further into skincare. The acquisition – e.l.f.'s biggest ever, according to FactSet – is comprised of $800 million in cash and stock, plus an additional potential $200 million payout based on Rhode's performance over the next three years. The deal is expected to close in the second quarter of the company's fiscal 2026 — or later this year. 'I've been in the consumer space 34 years, and I've been blown away by seeing this brand over time. In less than three years, they've gone from zero to $US212 million in net sales, direct-to-consumer only, with only 10 products. I didn't think that was possible,' CEO Tarang Amin told CNBC in an interview. 'So that level of disruption definitely caught our attention.' In a news release, Bieber said she's excited to partner with e.l.f. to bring her brand to 'more faces, places, and spaces.' 'From day one, my vision for Rhode has been to make essential skin care and hybrid makeup you can use every day,' Ms Bieber said. 'Just three years into this journey, our partnership with 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.' e.l.f. shares dropped about 4 per cent in extended trading after the company announced the acquisition and released results for its fiscal fourth quarter. The company topped Wall Street's quarterly estimates, but did not offer guidance due to the Trump administration's changing tariff policy. e.l.f. gets a disproportionate amount of its products from China. Hailey Bieber is set for a monster windfall. Credit: XNY/Star Max / GC Images Launched in 2022, Rhode has more than doubled its customer base over the past year and generated $US212 million in revenue in the 12 months ended March 31. The company's growth has primarily come through its website, but it plans to launch in Sephora stores throughout North America and the U.K. before the end of the year. As part of the acquisition, Bieber will serve as Rhode's chief creative officer and head of innovation, overseeing creative, product innovation and marketing. The brand was launched alongside two co-founders, Michael and Lauren Ratner, but it was Bieber's influence and name that turned it into a billion-dollar brand. Under her direction, Rhode last year became the No. 1 skincare brand in earned media value — or exposure through methods other than paid advertising — with 367 per cent year-over-year growth. Rhode is a solid match for e.l.f., which has seen growth skyrocket in recent years in large part to its digital prowess. The company has legions of online fans and is known for TikTok marketing that feels more natural to consumers. The company is also looking to dig deeper into skincare, which has become more popular with all age groups, particularly e.l.f's younger, core consumer. In 2023, it acquired skincare brand Naturium for $US355 million. Its acquisition of Rhode will allow it to build on its skincare growth and reach a higher income consumer. 'el.f. cosmetics is about $6.50 in its core entry price point, Rhode, on average, is in the high 20s, so I'd say it does bring us a different consumer set to the company overall, but the same approach in terms of how we engage and entertain them,' said Amin. The deal makes sense for e.l.f., and it was a competitive move to snag the brand before rivals did, but it comes at an uncertain and difficult time for the company. Even with expected price increases, China tariffs will likely reduce e.l.f.'s profits over time, and it's funding $US600 million of the deal with debt at a time of high interest rates. The acquisition is a bet that consumers will keep spending on high-end skincare, even during a potential economic slowdown or recession. e.l.f. made the announcement as it posted fiscal fourth quarter results, which beat Wall Street's expectations on the top and bottom lines. Here's how the beauty retailer performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG: Earnings per share: 78 cents adjusted v 72 cents expected Revenue: $US333 million v $328 million expected If you'd like to view this content, please adjust your . To find out more about how we use cookies, please see our Cookie Guide. The company's reported net income for the three-month period that ended March 31 was $28.3 million, or 49 cents per share, compared with $US14.5 million, or 25 cents per share, a year earlier. Sales rose to $332.7 million, up about 4 per cent from $321.1 million. e.l.f.'s sales have increased rapidly in recent years, but investors have grown concerned as that growth started to slow and the threat of tariffs began weighing on its business. The company sources about 75 per cent of its products from China, which currently faces a 30 per cent duty on exports to the US Last week, it announced plans to raise prices by $US1 to offset higher costs from tariffs beginning on Aug. 1. While US duties on Chinese imports are 30 per cent now, that could change as President Donald Trump negotiates with Beijing. As a result, e.l.f. said it isn't providing a fiscal 2026 outlook 'due to the wide range of potential outcomes related to tariffs.' Amin said el.f. paid more than 145 per cent in duties before Trump agreed to slash the levies on Chinese goods, but those costs didn't come through during the quarter and will show up when the company reports its fiscal 2026 first-quarter earnings.
