E.l.f. The beauty company acquired Rhode through a $1 billion deal to buy the skincare brand which model and entrepreneur Hailey Bieber founded for expanding younger customer base and building skincare market dominance.
According to the joint announcement from the companies Rhode achieved $212 million in net sales throughout the 12-month period ending March 31. Rhode plans to introduce its products to Sephora stores across North America and the United Kingdom during the current year for expanded retail availability.
The 28-year-old Bieber maintains her position as chief creative officer and head of innovation at Rhode while remaining the brand’s leader. The strategic advice E.l.f. receives from Bieber will help the company integrate Rhode into their existing beauty product range.
E.l.f. CEO Tarang Amin explained that Rhode has established itself as a prominent skincare brand because its modern look attracts younger buyers. The acquisition strengthens our ability to connect with new market segments which drives long-term expansion for the company.
The beauty industry now embraces Rhode’s clean design because it meets the preferences of younger buyers who want to distance themselves from the glam aesthetic that Kim Kardashian promoted during the last decade.
E.l.f. agreed to pay $600 million in cash while issuing $200 million worth of new shares to Bieber and Rhode’s investors through the deal’s terms. The brand can earn an extra $200 million in performance-based payments throughout three years based on its growth performance.
The acquisition demonstrates how E.l.f. will use its social media platforms and direct-to-consumer channels to reach new consumers. The beauty industry has experienced growing consolidation because large companies aim to acquire fast-growing independent brands.
Rhode’s quick ascension to success becomes apparent through this deal while celebrity-founded beauty companies use their fan connections to transform the cosmetics industry with modern branding strategies.
