Hailey Bieber Explains Rhode’s $1 Billion Acquisition by e.l.f. Beauty
Founders prioritized creative control and operational autonomy over price during the acquisition process.
1Strategic Acquisition Rationale
Hailey Bieber and co-founder Lauren Ratner sold their beauty brand, Rhode, to e.l.f. Beauty in a deal valued at up to $1 billion. Despite the massive valuation, the founders prioritized maintaining their creative autonomy. They sought a partner capable of providing the global infrastructure necessary to scale operations beyond their current limits.
2Addressing Founder Fears
Bieber entered negotiations with significant apprehension regarding potential loss of control. She feared that an acquirer would replace key personnel or dilute her influence over product development. By openly discussing these concerns with e.l.f. leadership, she ensured that her role as a creative leader would remain intact post-acquisition, protecting her brand vision.
3Operational Autonomy Agreement
E.l.f. Beauty explicitly committed to not interfering with Rhode’s existing successful business model. The acquirer promised to supercharge the back-end infrastructure while allowing the original team to continue operating exactly as they had before. This clear division of labor convinced the founders that their unique special sauce would remain preserved and protected.
4Post-Acquisition Reality
More than a year after the deal, Bieber confirms that e.l.f. has honored all initial agreements. She retains decision-making authority over creative and product innovation, even expanding her influence as a strategic advisor to the parent company. The partnership has functioned as a dream scenario, allowing the brand to maintain its original identity.
5Scaling Through Retail
Rhode’s growth necessitated a shift from a direct-to-consumer model to a broader retail strategy. Entering Sephora in the U.S. last September served as a critical milestone. The brand now holds the number one position in every retail market it operates in, including Sephora U.K. and Mecca in Australia, proving the effectiveness of the expansion.
6European Market Expansion
The brand recently launched across 19 new European markets, spanning more than 500 retail doors. The impact was immediate, with first-day online sales through Sephora EU surpassing the total Black Friday sales recorded for the entire region in the previous year. This performance highlights the massive demand for the brand in international territories.
7Financial Performance Metrics
The bet on the acquisition appears to be yielding strong financial results for both parties. Rhode generated approximately $390 million in net sales during fiscal 2026, representing an 80% increase compared to the previous year. The company has publicly stated its ambitious goal to surpass the $1 billion mark in total net sales.
8Long-term Strategic Outlook
The success of the Rhode acquisition demonstrates the value of aligning cultural and operational expectations before finalizing a deal. By focusing on infrastructure support rather than management replacement, e.l.f. Beauty successfully integrated a high-growth brand. This model serves as a case study for founders seeking to scale without sacrificing their core creative influence.