Hailey Bieber's makeup and skincare brand, Rhode, is set to be acquired by Elf Beauty for approximately $1 billion USD. This acquisition will provide Elf, a budget cosmetic retailer, with access to Rhode's celebrity-endorsed product line, which has gained significant traction among Gen Z and millennials since its launch in 2022.
The deal involves an upfront payment of $800 million USD in cash and stock to Rhode shareholders, along with an additional potential earn-out of $200 million USD based on performance metrics. This move comes as Elf seeks to pivot its strategy and expand into the prestige beauty market amid dwindling demand from its traditional mass-market customer base, which is facing ongoing inflationary pressures.
Rhode, known for its TikTok-viral products, such as the $18 USD "peptide lip treatments," currently sells its products exclusively through its website and pop-up stores, leveraging Hailey Bieber's social media presence for promotion. In contrast, Elf's products are typically priced between $2 USD and $3 USD and are available at major retailers like Walmart and Ulta Beauty.
Bieber, who will remain involved as founder and strategic advisor post-acquisition, expressed optimism about the partnership, highlighting opportunities for broader distribution and innovation. For Elf, the acquisition of Rhode not only diversifies its portfolio but also represents its largest acquisition to date, following its previous purchase of skincare brand Natrium for $355 million USD.
The transaction is anticipated to close in the second quarter of fiscal 2026. This strategic move aligns with Elf's goals to enhance its market presence and adapt to changing consumer preferences.