Memo#16: I Belieb I can Fly

Hailey Bieber just sold Rhode, her beauty line, for $800mn to e.l.f. Cosmetics¹ (the media is mostly quoting that $1bn figure, but $200mn of that is earnouts linked to the brand’s performance, so not quite a billion, just yet).

It’s hard not to look at the deal and think back to Kylie Jenner’s sale of Kylie Cosmetics to Coty back in 2020 -- the 51% stake she sold to Coty valued the company at $1.2bn (roughly 6x sales multiple, or 28x EBITDA). Sales of Kylie’s brand have been disappointing in recent years. It’s hard to track precisely because Coty doesn’t disclose its sales by brand, merely lumping them into “prestige” and “consumer”. Kylie sits in the “prestige” segment and of an increase in $436mn in revenue in 2024, only $24.5mn of that was attributable to cosmetics -- the company said it was “primarily” from Kylie Cosmetics (i.e. even then, the brand’s growth represents a tiny fraction of revenue growth for the beauty conglomerate).