E.l.f. Beauty acquires Hailey Bieber’s rhode in $1b deal

NEW YORK (AP):

E.l.f. Beauty has acquired Hailey Bieber’s rhode skincare brand in a US$1 billion deal, the companies said.

Bieber’s rhode had US$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 UK.

Bieber, 28, a model and the wife of singer Justin Bieber, will be rhode’s chief creative officer and head of innovation and also a strategic adviser to the combined companies.

She launched rhode, which is her middle name, as a skin care line in June 2022 and has since expanded the brand to include blushes, coloured lip balms and lip liners.

The brand is popular with young consumers and other fans of Bieber’s fresh-faced, casual aesthetic, which has emerged as an alternative to the ultra-glam, heavily made up looks popularised by Kim Kardashian a decade ago.

Under the terms of the agreement, e.l.f. will acquire rhode for US$600 million in cash and US$200 million of newly issued shares of e.l.f. Beauty common stock. The deal also includes a potential payment of US$200 million based on the future growth of the brand over three years.

E.l.f., which stands for ‘eyes, lips and face’, started in 2004 as an affordable make-up brand whose products initially were sold only online. It expanded into retail stores like Target and grew further in step with social media trends, highlighting less expensive versions of high-end products.

The company, based in Oakland, California, reported Wednesday that net global sales increased 28 per cent to US$1.3 billion during its fiscal year that ended in March. “Due to the wide range of potential outcomes related to tariffs,” it said it would not provide financial guidance for the current year.

E.l.f.’s sourcing policy says most of its products are made by suppliers in China, whose goods were subject to a 145 per cent tariff for over a month before President Donald Trump lowered the rate to 30 per cent. On Wednesday, the brand advised followers on X that it planned a US$1 price increase starting August 1 but was “keeping an eye on the tariff situation as it evolves.”

Like Bieber’s rhode, e.l.f. says its products are all vegan and not tested on animals before reaching consumers. Both brands style their names with the first letter not capitalised.

“e.l.f. Beauty found a like-minded disruptor in rhode,” Chairman and CEO Tarang Amin said in a statement. “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.”

E.l.f. also owns beauty brand Well People, skin care brand Naturium and Keys Soulcare, a skin care line created by singer-songwriter Alicia Keys.