It's kind of wild to think about how Rhode, one of the most successful and influential beauty brands in recent history, debuted only three years ago. In 2022, the thought of selling the direct-to-consumer brand was a distant dream for founder Hailey Bieber—but it’s already here. E.L.F. Beauty announced today that it is acquiring Rhode.
Though this acquisition has been widely reported as a $1 billion deal, in reality, we have no idea yet just how much money will ultimately change hands. But it will certainly be a massive amount: As a press release tells it, that billion-dollar figure is “comprised of $800 million of consideration payable at closing in a combination of cash and stock, subject to customary adjustments, and an additional potential earnout consideration of $200 million based on the future growth of the brand over a three-year timeframe.” As it stands, the agreement has been approved by the E.L.F. Beauty board of directors, and the transaction is expected to close next year.
Allure spoke with Bieber today about what this means for her and her brand. In short: expansion, something Bieber had hoped to achieve since Rhode’s conception. “When you're launching a brand, you're just so focused on what's right in front of you at the time,” Bieber says of Rhode’s early days. “And of course, you always have really big dreams and really big goals for it. This is definitely one of those things being realized. I could never have anticipated that it would happen at this exact time.”
That growth is certain with E.L.F. Beauty, which also owns Keys Soulcare, Naturium, Well People, and, of course, the blockbuster drugstore brand E.L.F. Cosmetics, bolstering it.
As for the branding of Rhode, it seems that, going forward, it won’t change much, if at all. “We want to nurture Hailey's vision, and that includes providing more resources and investing more in marketing,” says E.L.F. chairman and CEO Tarang Amin, who calls Bieber the most thoughtful founder he's ever met. “She's built an incredible team that we want to continue to build and expand globally.”
Amin and Bieber’s excitement to be working together is tangible even through a Zoom thumbnail, though that’s to be expected of any two people who just made a deal as potentially lucrative as this one. Bieber says she feels confident about the E.L.F. team as business partners and as people since meeting them. “Vibes matter,” Bieber says. She believes her new investors are, for lack of a better word, invested in her as a creative force (again, not a surprising thing for someone to say of an entity that’s now funding their company). “[The E.L.F. team] care about founders and… supporting [my] vision and giving their resources to take it to the next place.”
The first next place is Sephora. It was announced a week ago that Rhode will be expanding beyond its DTC model and arriving on the beauty retailer’s digital and brick-and-mortar shelves this fall. “I'm super excited,” says Bieber, reminding me that Rhode has also done plenty of its own in-person pop-up experiences. “I think we'll probably still play in that space. But we're really focused on Sephora right now.”
That doesn't mean there isn't a lot more for Bieber to do now that Rhode is moving under the E.L.F. umbrella. In fact, her role is set to expand, even trickling over to other parts of E.L.F: “I'll be the chief creative officer and head of innovation at Rhode and advisor to E.L.F. Beauty,” Bieber tells Allure. “I feel like at this very moment in time, my vision has never been more clear to me. I want to expand globally, and I have so many more dreams and goals that I want to be realized. And I really believe that E.L.F. is going to help us get there.”
My last question about the immediate future of Rhode is whether this new partnership could mean a crossover collection with E.L.F. Cosmetics. When asked, Bieber offers a broad, sly smile. Amin responds, “Well, that'll depend on our strategic advisor.” In other words: If Bieber wants it, we’ll all get it.
“I'm always open to seeing how we can innovate together. I mean, that is the whole point of all this,” she tells Allure. “I would say nothing's off the table.”
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