The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

BEAUTY

Selena Gomez’s Rare Beauty Exploring

an IPO or Sale as Net Sales Cross $400
Million
The colour cosmetics line is one of the most successful to come out of the celebrity
beauty boom. An exit would likely touch off a bidding war, The Business of Beauty
has learned.

Founded by actress and singer Selena Gomez in 2020, Rare crossed $400 million in net sales in the 12 months ending in February.
(Rare Beauty)

By PRIYA RAO
20 March 2024

BoF PROFESSIONAL
Rare Beauty is exploring growth options to sell the brand or hold an initial public offering, The
Business of Beauty has learned, setting up what would likely be one of the biggest payouts for a
celebrity beauty brand ever.

Founded by actress and singer Selena Gomez in 2020, Rare crossed $400 million in net sales in
the 12 months ending in February, a person familiar with the company’s performance told The
Business of Beauty. That would put the brand on an elite tier in a crowded field of celebrity-
backed brands that sprouted up around the same time; only Rihanna’s Fenty Beauty, launched in
2017 has generated more sales (Kylie Jenner’s Kylie Cosmetics reportedly surpassed $300
million in annual revenue at its peak, though demand has since fallen). Rare’s sales are also
global, with nearly half coming from international markets, driven by an exclusive retail
partnership with Sephora in most regions.

Rare Beauty’s sales, which haven’t been reported publicly before, explain at least a $2 billion
asking price or more for the brand. This too would be an outlier even in the active beauty deal
space; in recent years, only Tom Ford’s $2.8 billion sale to The Estée Lauder Companies,
Kering’s $3.8 billion acquisition of Creed and a handful of other transactions are in a similar
playing field.

Sources close to the company told The Business of Beauty that a sale is only one of the options
Rare Beauty is exploring. Other possibilities include an IPO, or a partnership with a private
equity sponsor. It has hired investment banks Raymond James and Goldman Sachs to advise.
Bloomberg first reported that the brand was entertaining exit options.

Rare Beauty has been fielding acquisition inquiries since late last year, but the company has not
been presented with formal sale offers and has not provided financial information to prospective
buyers. At the earliest, a sale or exit could happen in 2025.

In the meantime, the prospect of Rare Beauty on the auction block could put the beauty M&A
market in a freeze. While a flurry of colour cosmetic brands, including Kosas, Makeup by Mario
and Merit are hoping to find buyers in 2024, industry sources have indicated that Rare Beauty is
by far big beauty strategics’ top pick, and that they’re willing to wait on other deals to line up
their best shot at the brand.

Gomez’s line launched at the peak of the celebrity beauty boom, which saw stars ranging from
Scarlett Johansson and Jennifer Lopez to countless influencers putting out their own lines.
While Rare Beauty initially leaned heavily on Gomez’s relatable, often vulnerable public image,
the products, including its Soft Pinch Liquid Blush, Soft Pinch Tinted Lip Oil and Positive Light
Liquid Luminizer soon transcended their famous founder’s appeal.
The brand’s largely Millennial and Gen-Z customers have been taken with the beauty label’s
positive messaging, and its Impact Fund, which raises awareness for mental health initiatives.
The combination of products people love and a fervent fan base have boosted not only sales, but
profits too: while public beauty companies including E.l.f. and L’Oréal have adjusted earnings
before interest, tax, depreciation and amortisation of around 20 percent of net sales, Rare is said
to have at least 35 percent.
FURTHER READING

Selena Gomez Weighs Sale of Cosmetics Brand Valued at $2 Billion

Actress and singer Selena Gomez has hired advisers to weigh offers for her cosmetics company, Rare
Beauty, according to people familiar with the matter.

How Selena Gomez Built Rare Beauty

The former Disney star’s brand has seen increasing popularity thanks to social media platforms like
TikTok and Instagram.

Inside the Millennial Mind of Selena Gomez

The pop superstar speaks to BoF's Imran Amed about mental health, the power of authenticity,
aligning herself with Coach and why it’s important to separate what you can see on your phone from
real life.

ABOUT THE AUTHOR

PRIYA RAO
Priya Rao is Executive Editor at The Business of Beauty at BoF. She is based in New York and
oversees BoF’s beauty and wellness coverage.

© 2024 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

More from Beauty

Analysis and advice on the fast-evolving beauty business.

L’Oréal Q1 Sales up 9.4% on Strong Mass Market

Demand
L'Oréal reported a 9.4 percent rise in first quarter sales on a like-for-like basis on
Thursday, beating expectations and easing concerns about a slowdown in the two biggest beauty markets;
the United States and China.
Gregg Renfrew Is Purchasing Beautycounter Out of
Foreclosure
The founder, who was ousted and recently came back to the line as CEO, will regain
control of the company.

Puig, Backers to Raise €2.6 Billion in Madrid IPO

Puig and its founding family plan to sell Class B shares at €22 to €24.50 each, the
Barcelona-based company said Thursday in a filing with the Spanish securities
regulator.

From Coachella to Stagecoach: Inside Beauty’s Big Bet

on Festival Season
Beauty labels hope to court the concert set for both brand awareness and
trendsetting opportunities.

VIEW MORE