E.l.f. Beauty Is Set to Acquire Hailey Bieber’s Rhode: What This Means for the Future of Beauty
In a game-changing move within the beauty industry, E.l.f. Beauty has just announced its plans to acquire Rhode, the fast-rising beauty brand co-founded by Hailey Bieber. This deal, projected to be worth up to $1 billion, marks E.l.f.’s largest acquisition to date and could redefine the landscape of skincare and cosmetics. Here’s what you need to know about this acquisition and why it’s a significant step for E.l.f. Beauty.
Understanding the Deal
The acquisition consists of an $800 million upfront payment, which includes cash and stock, plus a potential $200 million based on Rhode’s performance over the next three years. This deal is scheduled to close in the second quarter of E.l.f.’s fiscal 2026. E.l.f. CEO Tarang Amin lauded Rhode’s impressive journey—from zero to $212 million in net sales in just under three years—with a mere ten products in its initial lineup. “That level of disruption definitely caught our attention,” he said.
Bieber shared her excitement about the partnership, stating: “From day one, my vision for Rhode has been to make essential skincare and hybrid makeup you can use every day.” This collaboration aims to broaden the brand’s reach and accelerate innovative product offerings, making Rhode accessible to a wider audience.
The Rise of Rhode
Launched only in 2022, Rhode has quickly doubled its customer base and has primarily relied on direct-to-consumer sales through its website. With plans to expand into Sephora locations across North America and the UK before the year’s end, the brand is poised for exponential growth.
Bieber will serve as Rhode’s chief creative officer, focusing on product innovation and marketing strategies. Under her guidance, Rhode became the number one skincare brand in earned media value, boasting a staggering 367% growth year-over-year.
Why This Acquisition Makes Sense
E.l.f. has seen unprecedented growth, fueled by its digital marketing prowess, particularly on social media platforms like TikTok—where authentic engagement resonates well with its core younger audience. The acquisition of Rhode aligns perfectly with E.l.f.’s strategy to delve deeper into the skincare market, which has seen skyrocketing demand across demographics.
Bieber’s Rhode represents a higher-income consumer segment with an average product price in the high $20s, compared to E.l.f.’s core entry price of about $6.50. This diversification not only enhances E.l.f.’s brand portfolio but also positions it competitively against rivals.
Financial Insights and Market Concerns
Despite the optimism surrounding the acquisition, E.l.f.’s stock experienced a slight dip of about 4% in after-hours trading following the announcement, highlighting investor apprehensions. Although the company recently reported better-than-expected fiscal fourth-quarter results—earning $0.78 per share on revenues of $333 million—concerns over ongoing tariff issues with China loom large.
E.l.f. sources around 75% of its products from China and faces a 30% duty on exports to the U.S. As a result, the company has announced plans to raise prices by $1 to offset these costs. CEO Amin noted that E.l.f. had previously absorbed more than 145% in duties due to fluctuating trade negotiations, leading to uncertainty in their future earnings outlook.
Conclusion: A Strategic Bet on High-End Skincare
E.l.f. Beauty’s acquisition of Rhode signals a strategic pivot towards high-end skincare, emphasizing innovation and accessibility. As consumer habits evolve and spending on premium beauty products increases—even amid economic uncertainties—E.l.f. appears well-positioned to capitalize on this trend.
At Extreme Investor Network, we’ll continue to monitor this developing story and its impact on the beauty industry. The synergy between E.l.f. and Rhode represents more than just a business deal—it’s a glimpse into the future of how brands can grow and adapt in a rapidly changing market. Keep following us for the latest insights and trends in the world of business and investment.