Latest news with #elfBeauty
Forbes
3 days ago
- Business
- Forbes
E.L.F. Continues To Disrupt The Beauty Business By Acquiring Hailey Bieber's Rhode For $1 Billion
Ever since E.l.f. Beauty came on the scene, it's been in the business of disrupting the beauty industry. 'We were founded in 2004 and have sought to disrupt the traditional beauty model of high prices, long product cycles and traditional advertising,' it stated in its first annual report after going public in 2016. True to its word, it has been remarkably successful, ranking as the number one cosmetics brand in the U.S. in unit sales and number two in dollar share, according to Nielsen. Yet there's no shame in being number two in dollar share since its average unit price is well under that of other cosmetics brands and is likely to remain so even after an across-the-board $1 price increase takes effect in August. Afterwards, 75% of its products will remain under $10. Now E.l.f. has done it again. It's acquired Hailey Bieber's phenomenally successful Rhode brand for $800 million – $600 million in cash and $200 million in stock – payable at closing, expected in the second quarter, with the potential for an additional $200 million payout on the future growth of the brand over the next three years, for a total $1 billion. 'e.l.f. Beauty found a like-minded disruptor in rhode,' e.l.f. chairman and CEO Tarang Amin said in a statement. 'rhode further diversifies our portfolio with a fast-growing brand that makes the best of prestige accessible. We are excited by rhode's ability to break beauty barriers, fully aligning with e.l.f. Beauty's vision to create a different kind of company. rhode is a beautiful brand that we believe is ready for rocketship growth.' This is a hugely big deal for E.l.f., being only its third acquisition since acquiring clean-beauty brand W3ll People, now marketed as Well People, for $27 million in 2020 and skincare brand Naturium for $355 million in 2023. It's also big by recent industry standards, although there have been a few bigger. In 2023, L'Oréal paid $2.5 billion for Aesop – its largest acquisition at the time. But Aesop came with nearly 400 stores, unlike Rhode, which grew to $212 million in sales exclusively via e-commerce and occasional pop-up shops. However, it will launch in Sephora later this year. Also in 2023, Estée Lauder paid $2.8 billion for the Tom Ford brand, but it also included a fashion business, handled by partner Ermenegildo Zegna, and eyewear, now managed by Marcolin. Last year, Estée Lauder followed by completing the $1.7 billion acquisition of Deciem with its flagship The Ordinary skincare brand. However, it has been partnering with Deciem since 2017 after making an initial investment in the brand. Yet the $1 billion price tag for Rhode is a stretch for a brand that has only been in business for three years with a limited ten product range with prices starting at $18 for lip tint to $32 for its signature 'glazing milk,' well above E.l.f. comfort zone. The closest comparable is the $600 million Coty paid for a 51% stake in Kylie Jenner's Kylie Cosmetics with a total $1.2 valuation, but according to Forbes, that partnership has been rocky. In his Substack 'Making Cents' newsletter, Drew Fallon, former CFO of Mad Rabbit and CEO of Iris Finance, wrote, 'For me, the biggest takeaway is honestly the 3 years thing. I can't get over that, it's insane. Combine this with the fact that Rhode's products are innovative (i.e., potentially not durable) and I think this move is ALMOST desperate by E.L.F.' TD Cowen's Oliver Chen shares that concern. 'The main question with the Rhode acquisition is whether the brand has longevity beyond its celebrity hype.' There's no question that Bieber has capitalized on her celebrity status – she's the daughter of actor Stephen Baldwin and married to singer-songwriter and pop-icon Justin Bieber – but Rhode's success goes far beyond that. 'She is a celebrity, but what drove the valuation so high was the authenticity, the community building – 11 million followers on Instagram – and the very methodic and deliberate approach to product development,' shared Dr. Brent Ridge, who with business partner and husband Josh Kilmer-Purcell founded Beekman 1802 goat milk skincare brand. Ridge a great admirer of what E.l.f. and what Bieber and her Rhode team have accomplished. In fact, Beekman 1802 has followed much the same path, what he and Kilmer-Purcell call the principles of 'G.O.A.T. Wisdom,' which they've detailed in a book of the same name. The methodical, deliberate approach to product development that Ridge talks of – and that can also be called disruptive – is exemplified by signature Rhode products. Bieber coined the term 'glazed donut skin' to describe healthy, dewy and glossy skin. Rhode delivers the means to achieve it in a four-step skincare kit. And what Bieber started has turned into a glazed donut skin trend that has inspired many other brands, including E.l.f., which launched 'Donut Forget Putty Primer' in partnership with Dunkin' donuts. Extending beyond beauty, Bieber combined the award-winning Rhode Peptide Lip Tint with a iPhone cell phone case to carry these two everyday essentials everywhere. And Rhode tied the glazed donut skin trend with Peptide Lip Tint in collaboration with Krispy Kreme in a limited edition 'Strawberry Glazed Donut' colored and flavored tint. 'What gave us the conviction for a billion-dollar deal is Hailey and Rhode's track record and what they've been able to build and achieve with such a level of conviction and depth with their community and in the market,' E.l.f.'s Amin said to Vogue Business. 'But the thing that made us interested is that she is a fellow disruptor and that gives me a lot of confidence when I'm looking at a long-term M&A environment.' This deal comes at a pivotal time for E.l.f. Its revenues have grown from $230 million in 2016 – about where Rhode is today – to $1.3 billion in fiscal 2025. Most notably, E.l.f. more than doubled sales over the last two years – 2023 revenue reached $579 million. And it nearly doubled net income over the same period, from $62 million to $112 million this year. However, growth slowed significantly in the most recent fourth quarter, ending Mar. 31. Revenues rose a mere 4% over same period previous year, not bad relative to others in the industry, but way below recent levels. It averaged 56% quarterly growth since 2023 and it hasn't been so slow since 2019. Clearly, the Rhode acquisition will give a boost to E.l.f's growth in the coming quarters as E.l.f.'s dynamic product development engine is expected to help Rhode expand its product range, all the while maintaining its core brand DNA. Bieber will stay as the brand's chief creative officer and head of innovation, as well as act as a strategic advisor to Amin and the combined companies. E.l.f. has another celebrity-founded brand, Keys Soulcare with Alicia Keys. Rhode CEO Nick Vlahos, previously CEO of The Honest Company and prior to that with Clorox and Burt's Bees, will remain with the brand along with co-founders Michael and Lauren Ratner. Michael serves as co-executive chair of Rhode's board and Lauren is President and chief brand officer. 'We can't wait to bring rhode 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,' Bieber said in a statement. Coming from his G.O.A.T. Wisdom perspective, Dr. Ridge sees the E.l.f.-Rhode partnership as a match made in heaven, 'marrying a business powerhouse that has mastered disruptive marketing and product-market fit with a brand that has successfully de-centered its celebrity founder while still managing to capitalize on her for key moments.' 'Making Cents' Fallon is more reserved. 'In short, this HAS to work. They just bet the company on it. If this is another Kylie Cosmetics moment, E.L.F. will be the next Coty, a stock chart that doesn't look very fun.' See also:
CNBC
4 days ago
- Business
- CNBC
We are Target's #1 brand, we have over 20% of the category, says elf Beauty CEO Tarang Amin
elf Beauty Chairman and CEO Tarang Amin joins 'Mad Money' host Jim Cramer to talk quarterly results, the impact of tariffs, consumer trends and more.
Forbes
4 days ago
- Business
- Forbes
The Rise Of Rhode: 7 Marketing Lessons For Entrepreneurs
NEW YORK, NEW YORK - MAY 05: Hailey Bieber attends the 2025 Met Gala Celebrating "Superfine: ... More Tailoring Black Style" at Metropolitan Museum of Art on May 05, 2025 in New York City. (Photo byfor The Met Museum/Vogue) This week, Hailey Bieber's skincare brand Rhode was acquired by e.l.f Beauty for potentially $1 billion. Considering it was only founded three years ago, such a meteoric rise to success has attracted attention worldwide. Many entrepreneurs may be wondering: how did she do it? How did Rhode grow into a billion-dollar brand in such a short amount of time? Sure, her existing celebrity status and social media presence played a factor in its growth. However, there were other ways that Hayley Bieber grew the Rhode brand into the power player it is today. This article will explore marketing strategies utilized to build the Rhode brand that other entrepreneurs can emulate. Hayley Bieber didn't just tap into her existing social media following and leave it there. She became the face of Rhode. She shares her own personal Rhode beauty routines on social media, such as how she gets her famous 'glazed donut' skin. By integrating herself into the Rhode brand and sharing relatable, relevant, and practical advice, she elevated beyond celebrity status to become a highly trusted figure. It may surprise many that this billion-dollar brand was built from a product line of around 10 core products. With a smaller product line, they could continuously refine and innovate the products based on real-time consumer feedback. Rhode's marketing was focused on hero products, such as the viral Peptide Glazing Fluid. By focusing on quality over quantity, they could go deep into their marketing and story-telling for each product. It's no secret that innovative and creative products can lead to increased attention for a brand, and in many cases, virality. In 2024 Rhode launched the lip phone case, a branded case with a pocket to house a Rhode lip gloss. This turned into a beauty world icon, leading to lower quality knock-offs appearing in the market. The case blended a minimalistic design with practicality. Every one of their Gen-Z consumers has a smartphone. Why not integrate their brand and products into their everyday lives, yet make it aesthetic, so they would want to share it on social media proudly? Gen-Z and social media can be an incredibly potent mix when used in the right way for marketing. Rhodes strategically used TikTok and Instagram to build a loyal and engaged following of their Gen-Z target market. They utilize short-form video formats, influencer marketing, viral trends, educational content around skincare routines and how to use their products, and aesthetic lifestyle-based content. Rhodes don't just promote their products on social media. They built an engaged community of fans by interacting with them in the comment sections and having authentic conversations. They showed their fans that these conversations and feedback lead to results, such as developing new products (like the viral lip phone case). User-generated content (UGC) also plays a significant role in Rhode's marketing strategy. They ask their fans to post their skincare routines, "glazed skin" selfies, and product reviews on social media, which Rhode then shares on their channels. Sharing relatable and authentic fan content helps to build an engaged community and grows trust in the brand. Finally, strategic partnerships can help two brands tap into each other's communities to grow brand awareness, followers, and revenue. To do just this, Rhode collaborated with Krispy Kreme to create a new, limited-edition Peptide Lip Treatment product inspired by Krispy Kreme's Strawberry Glazed Donut. Hayley Bieber's Rhode uses a powerful mix of strategies to market the brand, creating one of the most significant success stories in the skincare and beauty industry. From tapping into TikTok, UGC, brand collaborations, or focusing on just a select few products at a time, entrepreneurs from any industry can take these strategies and apply them to their own businesses.
Washington Post
5 days ago
- Business
- Washington Post
e.l.f. cosmetics acquires Hailey Bieber's rhode beauty brand for $1 billion
NEW YORK — e.l.f. Beauty has acquired Hailey Bieber's rhode skincare brand in a $1 billion deal, the companies said. Bieber's rhode had $212 million in net sales in the 12 months that ended March 31. The company's products are only available online, but by the end of this year it plans to begin an in-store partnership with Sephora in North America and the U.K.
Associated Press
5 days ago
- Business
- Associated Press
e.l.f. cosmetics acquires Hailey Bieber's rhode beauty brand for $1 billion
NEW YORK (AP) — e.l.f. Beauty has acquired Hailey Bieber's rhode skincare brand in a $1 billion deal, the companies said. Bieber's rhode had $212 million in net sales in the 12 months that ended March 31. The company's products are only available online, but by the end of this year it plans to begin an in-store partnership with Sephora in North America and the U.K. Bieber, a model and the wife of singer Justin Bieber, will be rhode's chief creative officer and head of innovation and also a strategic advisor to the combined companies. Under the terms of the agreement, e.l.f. will acquire rhode for $600 million in cash and $200 million of newly issued shares of e.l.f. Beauty common stock. The deal also includes an additional potential earnout of $200 million based on the future growth of the brand over three years.
