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. Founder Hailey Bieber then brought it to the UK a year later.
In 2022, the thought of selling the direct-to-consumer brand was a distant dream for Hailey —but it’s already here. Elf Beauty announced yesterday that it is acquiring Rhode.
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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 here.
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 Elf Beauty's board of directors, and the transaction is expected to close next year.
In the meantime, Hailey Bieber has spoken about what this means for herself and her brand. In short: expansion, something Hailey had hoped to achieve since Rhode’s conception.
You heard it here first.
“When you're launching a brand, you're just so focused on what's right in front of you at the time,” Hailey recalls 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 realised. I could have never anticipated that it would happen at this exact time.”
That growth is certain with Elf Beauty—which also owns Keys Soulcare, Naturium, Well People, and of course the blockbuster drugstore brand Elf Cosmetics—bolstering it.
As for the branding of Rhode itself, it seems that won’t change much, if at all, going forward. “We want to nurture Hailey's vision, and that includes providing more resources and investing more in marketing,” says Elf chairman and CEO Tarang Amin, who calls Hailey 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.”
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Tarang and Hailey’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.
Hailey says she’s felt confident about the Elf team as business partners and as people since meeting them. “Vibes matter,” Hailey 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. As it was announced just a week ago, 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 Hailey 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 Hailey to do now that Rhode is joining the Elf umbrella. In fact, her role is set to expand, even trickling over to other parts of Elf.
“I'll be the chief creative officer and head of innovation at Rhode and advisor to Elf Beauty,” Hailey says. “I feel like at this very moment in time, my vision has not been more clear to me. I want to expand globally, and I have so many more dreams and goals that I want to be realised. And I really believe that Elf is going to help us get there.”
My last question about the immediate future of Rhode was whether this new partnership could mean a crossover collection with Elf Cosmetics. When asked, Hailey offers a broad, sly smile. Tarang responds, “Well, that'll depend on our strategic advisor.”
In other words: If Hailey 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 of this,” she says. “I would say nothing's off the table.”
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This article originally appeared on Allure.
