Hailey Bieber’s beauty and skincare brand Rhode has been acquired for $1 billion by Elf Beauty, pending approvals, marking one of the most high-profile beauty deals in recent years. Announced today, the acquisition comes just two months after it was reported in April that the brand hired JPMorgan Chase and Moelis to oversee the sale.
“Finding a home for Rhode was a really scary process, but as soon as I met the Elf Beauty team, I could tell they had such a strong sense of community and that spoke volumes to me because I know how I feel about our Rhode community,” says Bieber. She tells Vogue that even before she met with the team, she had admired their marketing campaigns and disruptive strategy within the beauty space. “I could have gone to a table of suits (referencing brand suitors), but Elf Beauty’s partnership offering was different,” she says.
Bieber will continue her role as founder while expanding her remit as Rhode’s chief creative officer and head of innovation, overseeing creative, product innovation and marketing. She will also act as a strategic advisor for both Rhode and Elf Beauty. “[The position] expands my role into the world of beauty even more, and I just want to continue being a force in the space globally,” Bieber explains.
Elf Beauty CEO Tarang Amin describes the partnership as the “perfect marriage”. Rhode will join the group’s existing portfolio, which consists of skincare brand Naturium (acquired in August 2023 for $355 million, according to the brand), singer Alicia Keys’s Keys wellness brand, Soulcare (acquired in 2020 for an undisclosed amount) and makeup brand Well People, which the beauty group acquired in 2020 for $27 million, per brand records.
“Hailey is more than a celebrity; she is the most thoughtful founder and has great strategic instinct. She has gone from zero to $212 million in net sales in less than three years, direct-to-consumer only, with only 10 products. [Bieber and the Rhode team] disrupted beauty, and I can think of no better brand that also aligns with our vision,” Amin says. The deal will comprise $800 million in cash and stock, as well as an earn-out consideration of $200 million based on future brand growth over a three-year timeframe.
Following the brand’s inception in 2022, Rhode has grown rapidly, thanks to highly shareable product aesthetics, and also cultivated a world beyond products with the lip gloss phone case, travelling photobooth and pop-ups, alongside the sheer influence of the founder herself. In 2024, Bieber drove $400 million in earned media value (EMV), with an engagement rate of 3.75 per cent, surpassing the 3.6 per cent industry benchmark, according to influencer marketing platform Lefty. (EMV is the equivalent advertising spend required to generate the same number of impressions gained via social media.)
Speaking to the brand’s growth, Bieber says: “The success comes down to a combination of things that my team and I have set out to execute from the beginning. We’ve been very strategic about product, marketing and creating tasteful, exciting experiences that are outside of the box. I don’t want to be like anybody else.”
Rhode’s retail debut at Sephora last week also boosted the brand’s credibility outside of Bieber’s sphere of influence. This shifted the brand beyond its direct-to-consumer (DTC) roots, setting it up to maximise sales, according to experts. Both Bieber and Amin say they will be doubling down and focusing on the retail rollout as part of the retail and distribution strategy lined up for the year.
The partnership is particularly notable given the cautious and subdued mergers and acquisitions (M&A) landscape of the past few years. With strategic buyers and equity investors largely focused on managing performance amid geopolitical tension, inflationary pressure and wavering consumer confidence, few billion-dollar deals have emerged since the 2019-2022 boom period — the era that saw the big-swing acquisitions of Tom Ford Beauty, Deciem, Kylie Cosmetics, Morphe and more.
Since then, industry experts say that inflated valuation expectations have contributed to a slowdown in significant deals. Against this backdrop, Rhode’s billion-dollar sale not only positions it as an outlier but signals real and robust value creation, while serving as a catalyst for renewed M&A appetite — a bet Amin is standing behind.
“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. But, the thing that truly 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,” says Amin. The CEO hopes that Elf Beauty will help maximise the brand’s dollar share, given its 20-year industry expertise and 25 consecutive quarters of growth, as well as expand the brand into new territories (Bieber referenced demand for Rhode in markets such as Brazil). “We’ll thoughtfully and sequentially (following the Sephora launch) take the brand around the world because it belongs everywhere,” he adds.
Increasingly, celebrity-founded brands need to demonstrate that they can succeed independent of their star ties. Aside from Bieber’s pull, Rhode’s strategic roadmap includes a streamlined product assortment, calculated expansion into makeup and body care, performance-driven marketing, viral social media execution and selective retail partnerships, all of which has made it a compelling blueprint for M&A in today’s turbulent and uncertain market.
As for the future of celebrity and high-profile-founded beauty players, Rhode has not only raised the bar, but it has helped shed the long-standing industry scepticism that could support other beauty deals possibly on the horizon, such as Rare Beauty, Makeup by Mario, One/Size and Glossier.
The brand signals a shift in what it takes to build long-term value as a celebrity brand moving forward. For the next generation of high-profile founders, real involvement in operations, product development and ownership is increasingly non-negotiable. The days of the high-profile or ‘celebrity-as-just-a-face’ model appear numbered, with Rhode offering a roadmap for longevity rooted in authenticity, influence and strategic substance. “Hailey’s vision and innate understanding of what consumers want in a product, coupled with our incredible team and innovative marketing approach, has enabled our exponential growth. I can’t wait to see what the bright future looks like with Elf Beauty,” says Lauren Ratner, Rhode’s co-founder, chief brand officer and president.
“I want to be the biggest beauty brand in the world, and I believe that Elf is going to help me get there,” concludes Bieber.
This story was originally published on Vogue Business.
