Hailey Bieber has joined an exclusive (and elusive) enclave of entrepreneurs after Rhode was acquired by E.l.f Beauty for US$1 Billion. The sale, which was confirmed on the founder’s Instagram, also brought with it news of a new chapter for Hailey herself, as she announced she’d be stepping into the roles of Chief Creative Officer and Head of Innovation at Rhode, while acting as strategic adviser to e.l.f Beauty.
“When I launched @rhode in 2022, I always had big dreams for the company, and the most important thing to me is to keep bringing rhode to more spaces, places, and faces globally,” Bieber said of the partnership.
“I found a like-minded disruptor with a vision to be a different kind of company that believes in big ideas and innovation in the same way that I do and will help us continue to grow the brand.”
Since it was founded in 2022, Hailey Bieber’s Rhode has maintained a strong grip on the beauty market. With just 10 products in its current stable, it’s been able to generate US$212 million in net sales in its most recent financial year – a figure no doubt bolstered by best-in-class marketing and its celebrity figurehead.
The acquisition marks an important step-up for Bieber, whose digital-native mindset has catapulted the brand to social media supremacy, garnering a devoted flock of followers willing to buy into the aspirational lifestyle offered by Rhode.
It was the ability to place product at the centre of a growing lifestyle brand that first attracted E.l.f chairman and chief executive, Tarang Amin, to the idea of a partnership.
“What we saw in Rhode was another like-minded disruptor,” he told BOF in an exclusive interview. “I see Hailey as much more than a celebrity, she is one of the most thoughtful founders I’ve ever met. She has incredible instinct, a beautiful aesthetic that’s absolutely resonating with her community.”
Infrastructure is a necessary formula for scale, and with the E.l.f acquisition, Rhode is able to do just that: grow.
Why Did Hailey Bieber Sell Rhode?
The acquisition news comes amid impressive year-on-year revenue growth for the brand, and as with any business looking to scale, investment becomes a matter of ‘when’ not ‘if’.
Under the terms of the agreement, E.l.f Beauty has agreed to a purchase figure of $800 million, inclusive of $200 million in shares. The additional $200 million is a conditional number determined by Rhode’s growth over a three-year period. Which, if Bieber’s cultural cachet continues to soar in an upwards trajectory – an undeniable factor in the brand’s continued success – there’s no reason to doubt the final invoice coming Bieber’s way.
Aside from the obvious fiscal benefits of building a brand to a level worthy of investment from such beauty bohemouths as E.l.f, the sale, so soon into Rhode’s businesses tenure, has prompted questions around timing. Why now? Why not in five years? After all, Amin himself said “She could have easily gotten more money from private equity or something else, but she cares about building this brand for the long term.”
Naturally, conversation around her husband’s rumoured financial woes entered the chat. The rumours in question relate to a recent article published in The Hollywood Reporter, which outlined the well-documented financial consequences of Justin’s ‘Justice’ tour cancellation.
According to sources, not fulfilling his contractual obligation to the tour’s promoter, AEG, caused a ripple effect that led to the Baby singer owing what insider’s claim to be upwards of US$20 million.
As per THR, Scooter Braun, his then-manager, allegedly covered the cost in the form of a “highly favourable (to Bieber) rate.” A loan, which allegedly is still left owing.
In January 2023, Bieber sold his entire catalogue of music for a reported $200 million, which included his master recordings. At the time, industry insiders and commentators alike questioned the agreement, and the staggeringly low sum involved. The questionable decision was thrown into the pit of intrigue surrounding the debt rumours, making it impossible to ignore the elephant in the (recording) room.
Bieber’s reps have since denied the debt allegations, issuing a statement that called the article “clickbait stupidity based on unnamed – and clearly ill-informed – ‘sources’, disappointed that they no longer work with Justin.”
Regardless, the Rhode sale comes at a time when the singer, and his struggles with mental health, are rarely out of the headlines, so naturally public intrigue will err on the side of scandal over celebration – which shouldn’t detract from Hailey’s monumental achievement, whatever the reason behind it.
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