E.l.f. Beauty has agreed to buy Rhode, the cosmetics and skincare brand founded by model Hailey Bieber, in a deal valued at $1 billion. The acquisition unites two popular brands, especially among Gen Z consumers, and helps e.l.f. diversify its supply chain beyond China.
E.l.f. will pay $800 million upfront to Rhode’s equity holders, including $600 million in cash and $200 million in e.l.f. stock. Depending on Rhode’s growth over the next three years, e.l.f. may pay an additional $200 million.
Rhode, launched in 2022, quickly gained popularity with a focused product line including pocket blushes and lip tints. The brand made $212 million in sales for the year ending March 31. Sephora will start selling Rhode products later this year.
The acquisition also helps e.l.f. reduce reliance on Chinese manufacturing, which currently accounts for 75% of its products and faces high tariffs. Many of Rhode’s suppliers are based in Europe, the U.S., and other parts of Asia.
Hailey Bieber will take on a leadership role as Rhode’s chief creative officer and head of innovation, and will serve as a strategic adviser for the combined company. She said, “We can’t wait to bring Rhode to more faces, places and spaces.”
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