At the end of May, U.S. beauty retailer e.l.f. Beauty announced the acquisition of Hailey Bieber’s minimalist makeup brand, Rhode, for $800 million.
Less than a week later, Huda Beauty founder and influencer Huda Kattan bought back equity in her namesake brand from private equity firm TSG Consumer, regaining full ownership.
As the market matures and becomes more rational, celebrity brand founders must now consider how to expand their influence. Rhode and Huda Beauty took different paths, yet their goal was the same—to ensure long-term, sustainable growth beyond the “early-stage traffic.”
Short-Lived Traffic, Long-Term Dilemma?
There’s no denying the immense influence celebrity brands wield. Hailey’s Rhode Beauty surpassed $10 million in sales within just 11 days of launch. In under three years, with fewer than 10 SKUs, the brand’s net sales reached $212 million.
Domestic celebrity brands have seen similar success. Jackson Wang’s fashion and lifestyle label, Team Wang Design, has cultivated a signature black-and-minimalist aesthetic since its inception. Late last year, the brand opened an offline pop-up in Shenzhen’s MixC Water Plaza, drawing massive crowds.
Likewise, Chinese actor Bai Jingting’s GoodBai store on Shanghai’s Yanqing Road saw three-hour-long queues on opening day, turning the street into a hotspot for niche designer brands. This year, the brand continues to expand, recently entering Chengdu. Similarly, Fan BingBing’s comeback boosted Fan Beauty’s Tmall debut to over 10 million RMB in sales, while Wang Hedi’s streetwear label D.Desirable remains a crowd-puller a year after opening on Anfu Road.
Celebrity halo fuels rapid early-stage growth, but capital’s attitude remains ambivalent. While impressed by the speed, investors often prefer to cash out while the brand still benefits from its founder’s fame, avoiding potential valuation drops from future stagnation. One insider noted that e.l.f.’s acquisition of Rhode Beauty may be the beauty industry’s fastest majority-stake deal valued at “$1 billion or above.”
However, concerns linger. Rhode Beauty’s product line remains narrow, reliant on a few hits, and primarily online-driven, raising questions about long-term resilience. With only three years in the market, its brand narrative and content are still underdeveloped. Buyers may prefer partial stakes to retain the celebrity’s creative influence and mitigate the risk of value erosion if the star steps back.
Conversely, severing ties with the celebrity founder too early—before the brand establishes its own cultural identity—can hinder long-term growth. Huda Kattan’s buyback highlights the tension between private equity and brand sustainability. Though she didn’t disclose terms, she admitted paying a “significant sum” to regain control. Since resuming as CEO, she’s focused on rebranding and expanding into untapped consumer segments.
