Many may remember the makeup industry boom of the 2010s, when YouTube beauty tutorials dominated screens and trips to Sephora for the latest launches or celebrity collaborations became a weekly ritual.

For some consumers, keeping up with the newest palettes and viral lip kits even meant maxing out a credit card or two.

That era led to the emergence of new and then-innovative beauty brands, such as Kylie Cosmetics, ColourPop, Morphe, Anastasia Beverly Hills, and Pat McGrath Labs. At the time, mastering a smoky eye or finding the perfect nude lipstick topped consumers’ priority lists, but the industry has since undergone a drastic shift.

The unexpected arrival of the Covid pandemic disrupted that momentum. With social distancing and remote work becoming the new norm, demand for makeup softened, forcing beauty retailers and brands to restructure debt, close stores, and, in some cases, file for bankruptcy.

While some brands appeared to have defied all odds and emerged resilient as the beauty industry began its recovery, recent developments suggest that the pandemic’s lingering effects are still being felt, even by the most prestigious names in the business.

Pat McGrath Labs seeks a buyer

The financial services firm Hilco Global revealed in a press release that Pat McGrath Labs has put its assets up for auction.

Bids will be accepted through January 26, with the auction taking place via Zoom. Qualified bidders may also attend an in-person public auction on January 27.

The brand’s assets will be sold on an “as-is,” “where-is” basis. Hilco Global noted that it has not independently verified Pat McGrath Labs’ financial performance and operations, and prospective buyers are encouraged to conduct their own due diligence.

“Continuing to build the brand will require a mix of maximizing the core and continuing to lead and set trends with product innovation and intuition,” said Hilco Global Chief Commercial Officer Richelle Kalnit in the press release.

“Strong fundamentals not only provide a stable foundation of recurring revenue and targeted innovation, but also a solid base for future expansion.”

Pat McGrath Labs seeks a buyer as it faces a beauty sales slump.

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Pat McGrath Labs history

Founded in 2015 by British makeup artist Dame Pat McGrath, Pat McGrath Labs is renowned for its high-performance formulas, richly pigmented eyeshadows, iconic lip products, and luxurious, statement-making collections. 

The brand blends technology and creativity to launch products that often set trends rather than follow them, according to Hilco Global’s description.

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The brand quickly gained popularity, and in 2018, it secured a $60 million investment from Eurazeo Brands, which enabled it to expand its U.S. distribution and meet growing global demand. The funding brought Pat McGrath Labs’ total external investment to $88 million, according to the press release.

Four years later, Eurazeo Brands exited Pat McGrath Labs and sold its stake, Mergr reported. While the firm didn’t disclose its exact reasons, reports suggest that the brand has been facing slowing sales in the years following the pandemic, according to Business of Fashion.

Pat McGrath Labs finances

As a privately held company, Pat McGrath Labs doesn’t disclose detailed financial statements. However, ECDB estimates that the brand generated $23 million in revenue in 2024, unchanged from the previous year, with growth expected to remain flat.

However, the brand’s online performance has shown some stabilization. Monthly online sales reached $2 million in December 2025, representing a 5% to 10% increase from November. The U.S. accounted for around 60% of those sales, underscoring its continued reliance on its domestic market.

The changing business of the beauty industry

The global beauty industry is valued at approximately $450 billion, with annual growth of 5% projected through 2030, according to McKinsey & Company’s State of Beauty 2025 Report.

In the U.S., the prestige beauty market rose 2% to $16 billion in the first half of 2025, while sales at mass merchants increased 4% to $34.6 billion, according to Circana.

Despite this growth, consumer preferences continue to evolve, making it increasingly crucial for brands to stay ahead of trends to avoid being outpaced by the competition.

“A strong uptick in beauty spend, plus higher inflation and greater access to information, has pushed shoppers to pay closer attention to whether products deliver,” said McKinsey & Company industry analysts. “Consumers are selectively splurging across not only consumer discretionary categories but also beauty subcategories.” 

While the beauty market has been consistently resilient, makeup sales were weak during the first quarter of 2020, prompting widespread store closures, according to McKinsey & Company’s 2020 COVID-19 Beauty Report. This downturn was driven by several pandemic-related shifts that permanently altered the industry.

Covid-driven shifts in the beauty industry

  • Rise of e-commerce: Online shopping platforms became a primary sales driver, reducing reliance on brick-and-mortar retail.
  • Accelerating innovation: Consumer demand and preferences shifted rapidly, forcing brands to speed up product development while maintaining sufficient inventory.
  • Pressure on suppliers and capital: Many companies had to seek new sources of funding, placing significant strain on the balance sheets of brands, retailers, and suppliers.

“Even before the pandemic, brands were under pressure to overhaul their product-innovation pipelines,” said McKinsey & Company industry analysts. “Now, the need for speed is even greater.”

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