Why Did Hailey Bieber Sell Her Skincare Brand Rhode to e.l.f. Beauty?

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On Wednesday, May 28, Hailey Bieber announced that she is selling her hit makeup brand, rhode, to e.l.f. Beauty—the California-based cosmetics company founded in 2004 by Joseph Shamah and Scott Vincent Borba. The deal values the viral brand at $1 billion.

The 28-year-old model, who is married to pop star Justin Bieber, co-founded the skincare products line in 2022, alongside filmmaker Michael D. Ratner and his wife, Lauren Ratner, a former marketing director at Reformation. In fact, «Rhode» is Hailey’s middle name.

The agreement comprises $600 million in cash, $200 million in e.l.f. Beauty shares, and up to an additional $200 million in performance-based payouts over the next three years, contingent on the brand’s growth. However, is not clear yet what percentage of the company she owns. After the agreement, Bieber, 28, will remain involved in the brad as Chief Creative Officer and Head of Innovation.

 

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With these changes on the horizon for rhode and Hailey Bieber, the big question remains: why did she ultimately decide to sell her multi-million dollar company?

Since several media outlets recently reported on Justin Bieber’s alleged financial collapse—which may have prompted the $200 million sale of his music catalog—many might wonder if Hailey is agreeing to this deal due to financial issues as well. However, that doesn’t appear to be the case.

The Possible Reasons Behind Hailey Bieber’s Rhode and Elf Beauty

Hailey Bieber’s decision to sell her skincare brandIhode to e.l.f. Beauty in a $1 billion deal seems to be a strategic move driven by several key factors.

First of all, the global expansion and scaling elements; Bieber emphasized that her goal has always been to bring rhode to more people globally. Partnering with e.l.f., which has a strong infrastructure and global distribution network, allows rhode to scale much faster than it could independently.

«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,» the model wrote on Instagram after announcing the e.l.f. acquisition.

Despite the sale, Bieber is not stepping away from the brand. She will remain deeply involved as Chief Creative Officer and Head of Innovation, and also serve as a strategic advisor to e.l.f. Beauty. This also suggests the deal is more about growth and less about cashing out.

Furthermore, rhode generated $212 million in net sales in its most recent fiscal year, showing strong performance with a lean product line. The brand’s success, especially among Gen Z and millennials, made it an attractive acquisition target. The timing also aligns with e.l.f.’s strategy to diversify into prestige beauty, a segment where rhode is thriving despite broader market slowdowns.

It is also important to note that both companies are seen as «disruptors» in the beauty space. e.l.f. CEO Tarang Amin praised Hailey as a thoughtful founder with a strong aesthetic and community connection, which aligns with e.l.f.’s values and vision.

The Business Behind Celebrity Brands

As Kylie Jenner or Rihanna’s star makeup brands, Hailey Bieber’s cultural influence and rhode’s viral success (especially on platforms like TikTok) created a unique opportunity to capitalize on momentum. The deal includes a mix of cash, stock, and performance-based earnouts, indicating confidence in rhode’s continued growth.

«Celebrity brand acquisitions are usually structured this way: the celebrity continues to be a part of the company for a few years. We all know the celebrities and their personal brands play a huge role in growing these businesses. Ideally, the acquiring company will figure out a strategy to grow the brand independent of the celebrity over the next few years», the finance expert Mahalakshmi C commented on Instagram. «In the meantime, the company is incentivised to keep performing well with a future payment – this is known as an earn-out. For rhode, the acquisition was for $1bn, but $200mn will only be earned if the company hits certain targets over the next 3 years,» she added.