Rhode, Hailey Bieber’s makeup and skincare brand, is being snapped up by Elf Beauty for about $1 billion US, giving the budget cosmetic retailer access to a celebrity-endorsed product line that has become hugely popular among Gen Z and millennials.
Elf said on Wednesday it would pay Rhode shareholders $800 million US in a combination of cash and stock, and an additional potential earn-out consideration of $200 million US, subject to certain performance-related conditions.
Reuters reported last month that Bieber, a 28-year-old model, was exploring a sale of the brand.
For Elf, the deal would mark a shift in strategy and expansion into the prestige beauty market, as the company faces weak demand from mass market customers who are being pressured by persistent high inflation.
Elf — short for eyes, lips and face — offers products priced as low as $2 US to $3 US each at U.S. and Canadian retailers, including Walmart, Ulta Beauty, Target, Shoppers Drug Mart and Rexall.Â
On the other hand, Rhode — which launched in 2022 and gained popularity with TikTok-viral products such as its $18 US “peptide lip treatments” — sells exclusively through its own website or pop-up stores, relying heavily on Bieber’s social media influence.
“Elf Beauty marks an incredible opportunity to elevate and accelerate our ability to reach more of our community with even more innovative products and widen our distribution globally,” Bieber said.
The company raked in about $212 million US in sales for the year that ended March 31, and is planning to start selling at Sephora stores across the U.S. and Canada coming this fall, followed by the U.K.
“Rhode further diversifies our portfolio with a fast-growing brand that makes the best of prestige accessible,” Elf CEO Tarang Amin said in a statement.
Earlier this year, Elf’s shares cratered 20 per cent after the company cut its annual forecasts and warned of weakening demand.
Elf’s deal with Rhode would mark its biggest acquisition to date and follows its $355-million US acquisition of skincare company Natrium in 2023.
Bieber will continue her role as founder and will also act as a “strategic advisor” after the deal closes. The transaction is expected to close in the second quarter of fiscal 2026.
