Hailey Bieber Sells Rhode Beauty To e.l.f. For $1 Billion

Hailey Bieber did not just sell Rhode Beauty, she basically sold the whole hype machine. e.l.f. just bought the brand for a reported $1 billion, and the wild part is Hailey is staying right where she is, running creative and innovation as Rhode’s chief creative officer.

So the deal is simple on paper, but messy in real life. e.l.f. is already dealing with higher costs from a tariff-driven China bill, with production heavily tied to China, and prices are creeping up by 55%. Meanwhile, Rhode’s entire strategy is built on a tight lineup and fans who line up for pop-ups and snap up products online, fast.

Here’s the full story of how one billion-dollar beauty purchase collides with tariffs, pricing, and a fan base that treats Rhode like an event, not a website.

Hailey Bieber stays on as Rhode’s creative lead, bringing strong influence and a loyal fan base.

Hailey Bieber will continue to play a significant role in the company, remaining as Rhode’s chief creative officer and head of innovation. She’s not only the founder but also the creative director, deeply involved in shaping the brand’s image and products.

Given her strong social media presence, both from before and after marrying singer Justin Bieber, she brings a powerful platform to the table. E.l.f. highlighted this in its earnings call right after the acquisition announcement.

The company praised Rhode’s “powerful engagement model,” pointing out how fans will line up for hours at Rhode pop-up events and how its products often sell out online. That kind of loyal following is a significant asset.

That’s the part Hailey Bieber keeps in her hands, Rhode’s creative lead role, even after the acquisition hit.

One standout feature of Rhode’s approach is how focused its product lineup is.

“One of the things we really like about rhode is just how tight the product assortment is,” said e.l.f. CEO Tarang Amin during the call. “It’s only 10 products across skincare, color cosmetics, and accessories.”

This curated selection helps keep the brand manageable and creates strong demand for each product. E.l.f. itself is already a major player in skincare and makeup, especially popular with younger consumers.l.f. is the top cosmetic brand among teens. With the Rhode acquisition, e.l.f. expects to boost Rhode’s retail presence and expand internationally.

Market Trends and Brand Strategy

Acquiring innovative brands like Rhode can significantly enhance e.l.f.'s market position.

E.l.f. is raising prices due to a 55% cost hike from China tariffs.

However, this significant purchase comes at a tricky time. E.l.f. is navigating the fallout from the ongoing tariff battle between the U.S. and China under former President Donald Trump. About 75% of e.l.f.’s global production is based in China, and tariffs have pushed up costs by 55%, including tariffs imposed back in 2019.

These additional costs are a serious challenge for a company known for its affordable prices. In response, e.l.f. announced it will raise prices by $1 across its entire product line starting August 1. Most of its products are still priced under $10, but the increase is a clear sign of pressure from the tariffs.

Rhode

And right after the announcement, e.l.f. CEO Tarang Amin pointed straight at Rhode’s “powerful engagement model,” including those hours-long pop-up lines.

Benny Blanco also faced backlash, and he answered critics by revealing his foot on live TV, so what exactly happened?

Then the vibe turns, because e.l.f. is also raising prices to cover a 55% cost jump tied to China tariffs, even as it tries to grow Rhode internationally.

The uncertainty around tariffs has made e.l.f. cautious. The company did not provide guidance for this fiscal year, pointing to the unpredictability of the trade situation. Still, it remains committed to its production strategy.

“We believe our unique China-based supply chain is an area of competitive advantage we’ve been honing for the past 21 years,” the company said in the earnings call. “We are committed to our China team and suppliers.”

As for the Rhode deal itself, e.l.f. will pay $800 million in cash and stock upfront, with up to an additional $200 million possible based on Rhode’s performance over the next three years. The deal is expected to close later this year.

This acquisition shows how e.l.f. is doubling down on appealing to young, engaged consumers while navigating larger global trade challenges. Meanwhile, Rhode gains the resources and reach of a major player, setting the stage for faster growth.

Together, the two brands aim to carve out a bigger slice of the beauty market at a time when consumers are more selective and savvy than ever.

So while Rhode’s tight 10-product lineup keeps demand burning, e.l.f. has to sell that same momentum during a tariff mess that started years ago.

This acquisition reflects a broader trend in the beauty industry where larger companies seek to integrate niche brands to appeal to younger demographics. Social media marketing expert, Neil Patel, suggests that brands like e.l.f. should leverage Rhode's existing online presence to maximize visibility.

He advises creating co-branded campaigns that engage influencers and encourage user-generated content. This approach not only boosts brand recognition but also cultivates a community around the products, enhancing customer loyalty and driving sales.

The acquisition of Rhode Beauty by e.l.f. is a significant development in the beauty industry, highlighting the importance of aligning with modern consumer values. As the market evolves, brands must remain nimble and attuned to emerging trends to succeed in an environment where consumer preferences shift rapidly.

By adopting innovative marketing techniques and focusing on genuine engagement, e.l.f. can enhance its product range while deepening its connection with younger audiences. Establishing trust and fostering community relationships will be critical for e.l.f.'s sustained success in this competitive landscape.

Rhode might be the hottest product, but e.l.f. has to make the numbers work before the hype runs out.

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