After years of frenzied activity, the beauty M&A market is entering a new chapter — cautious but hopeful. High-profile brands like Hailey Bieber’s Rhode, Selena Gomez’s Rare Beauty, Merit, Makeup by Mario, and Glossier are exploring sale options amid a complex landscape shaped by macroeconomic pressures, geopolitical tariffs, and a new realism among investors.
A Market in Transition
The M&A momentum of the late 2010s through 2022 has cooled. Deal volumes and valuations have yet to return to those heights, largely due to several underperforming acquisitions and overzealous valuations from past years.
“Multiples were a bit frothy from 2017 into 2021,” says Andrew Charbin, managing director at PwC Corporate Finance. “A lot of strategic buyers paid big prices for brands at peak performance, but those deals haven’t always delivered.”
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To complicate matters, big bets on China and duty-free retail haven’t paid off for many conglomerates. Coupled with ex-President Trump’s tariff threats — dubbed “Liberation Day” — investor confidence has been shaken. New lending terms are tightening, especially for consumer discretionary sectors like beauty and fashion.
“Opening leverage in consumer discretionary has fallen by a quarter to a half-turn,” says Ben McArthur of TCW Private Credit. “Brands are going to face harder lending conditions in 2025.”
Bright Spots Amid the Headwinds
Despite the cautious climate, investor appetite for select, high-performance beauty brands remains strong. “The pipeline is rich with opportunity,” says Bain & Co. senior partner Federica Levato. “The beauty sector has always been resilient through uncertainty.”
Let’s take a closer look at some of the brands currently drawing investor attention:
Rhode
Annual Revenue (2024): ~$200M
Highlight: A viral brand built on minimalist skincare and Hailey Bieber’s star power, Rhode’s sharp rise and cult products like its lip peptides helped earn $248M in EMV last year — a 366% YoY jump. While the brand’s growth is explosive, investors are watching closely to see if it has long-term sustainability.
Rare Beauty
Annual Revenue (2024): >$400M
Highlight: Powered by Selena Gomez’s authenticity and mental health mission, Rare Beauty boasts massive EMV ($172M in Q1 2025) and strong retail presence. But its sheer scale might price out some investors, making an IPO a possible route.
Merit
Annual Revenue (2024): $100M+
Highlight: Known for its minimalism and clean aesthetic, Merit has a mature audience, strong DTC/retail balance, and brand collaborations that stand out in a crowded cosmetics space.
Makeup by Mario
Annual Revenue (2024): $150–$200M
Highlight: Celebrity makeup artist Mario Dedivanovic’s brand is growing steadily, with viral launches and international expansion. Its consistent performance and margin improvement are attracting serious investor interest.
Glossier
Annual Revenue (2024): $200–$250M
Highlight: A DTC pioneer now adapting to retail, Glossier is working to evolve beyond its millennial roots. Its brand equity is strong, but investors are watching to see if it can regain cultural dominance and appeal to younger consumers.
Kosas
Annual Revenue (2023): $120M (retail)
Highlight: Combining skincare and colour, Kosas’s clean formulations and inclusive shades have given it staying power. Its 2024 EMV reached $344M, and its brand consistency is a draw for investors in a crowded clean beauty space.
IGK Hair
Annual Revenue (2024): ~$80M
Highlight: A salon-rooted brand with influencer appeal and experiential retail, IGK has carved out a space in mass-tige haircare. It’s a strong candidate in a growing category, though not yet seen as the next K18.
One/Size Beauty
Annual Revenue (2024): ~$130M
Highlight: Founded by Patrick Starrr, One/Size combines performance makeup and influencer power. Its standout spray and event activations have made it a high-growth player, though investor concern may center on its reliance on Starrr’s personal brand.
What Comes Next?
With a glut of beauty brands seeking exits and more selectivity from both strategics and private equity, only the strongest, most differentiated brands are expected to close deals.
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“I do think we’ll see 10x+ multiples again,” says Charbin. “But deals will be fewer — and more meaningful.”
The message for beauty brands in 2025 is clear: scale, consistency, and cultural relevance matter more than ever.
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