Rare Beauty and Merit: Beauty's next billionaire brands

By Jo Allen | Published: 13-Jun-2024

Only a very small percentage of beauty brands make it to the billion-dollar dream. Which brands could hit this elusive milestone next?

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Fenty Beauty, Pat McGrath Labs, Charlotte Tilbury and Kylie Cosmetics easily spring to mind as beauty brands that have reached billionaire status, and all within a decade of launching.

But their monumental success is also a monumental exception to the rule.

McKinsey states in The Beauty Market in 2023: A special State of Fashion report that while the past decade has seen a number of new and independent labels benefit from steadily lower barriers to entry, growth beyond a successful initial run to achieve meaningful scale remains elusive for many.

Out of 46 brands founded in or after 2005 with global sales of $50m to $200m by 2017, only five exceeded $250m in global retail sales five years later, in 2022.

Aaron Alpeter, Principal and founder of Izba, a supply chain consultancy for start-ups, explains: “In the US alone, there are estimated to be around 5000 beauty brands and only the exceptions are billion dollar brands.”

Unlike in other sectors (such as SAAS), the multiples also tend to be somewhat tame in beauty, he explains.

“There are a lot of transactions happening in the $50-$100m range and only a handful that happen in the $1bn range.”

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