Pat McGrath Labs, the eponymous cosmetics company launched by the legendary makeup artist back in 2016, has just hit a major financial milestone. On Monday, New York City-based investment firm Eurazeo Brands announced that it had struck a $60 million deal to become a minority shareholder in the company.
Eurazeo's investment brings Pat McGrath Labs' total external funding to $88 million, according to a press release from the firm. While the specific terms of the deal were not disclosed, industry sources estimate that Eurazeo took a 5 to 8 percent stake in the company, putting its full valuation at more than $1 billion, according to a report by WWD, which also projects that the brand will bring in more than $60 million in sales for 2018. (For comparison, Forbes recently valued Kylie Jenner's overwhelmingly successful Kylie Cosmetics at $800 million.)
Pat McGrath Labs has become a popular staple at Sephora, reaching top-selling SKU status and attracting a reported 30 billion social media impressions since its debut. In its two years of business, it has outpaced many other brands, no doubt capturing the attention of industry executives and legacy corporations. There has been some speculation in the industry as to what the next step, business-wise, would be for the fledgling hit, but for McGrath, the objective of her line has remained constant.
"It has always been my dream to create an iconic beauty brand that goes beyond the usual limitations, that lives outside the parameters of what is expected," said McGrath in a statement via press release. "I am thrilled to be working with the unique and expert team at Eurazeo Brands."
Erazeo's previous investments within the beauty sector include Nest Fragrances, while its fashion investments include Moncler, Vestiaire Collective and Farfetch. It joins McGrath and existing investor ONE Luxury Group (also believed to be a minority stakeholder) in efforts to scale the brand, expand its product offerings and grow its global footprint.
"We are honored to be working with Pat, whose vision, talent and trailblazing history in the beauty industry have set Pat McGrath Labs up to be one of the most authentic and innovative makeup brands to ever come to market," said Jill Granoff, CEO of Eurazeo Brands, via a press statement. "We're excited to combine our experience of building global beauty and fashion brands with Pat and her team's unmatched creativity and passion." Granoff, who herself has an extensive background in beauty, spent a decade in senior leadership roles at Estée Lauder and in Victoria's Secret's beauty division.
As for what this investment will mean for the company, it's all about expansion. Pat McGrath Labs is currently sold online at PatMcGrathLabs.com and Sephora.com and in 54 Sephora doors; in the U.S., the brand plans to expand into 90 Sephora stores in the fall, as well as continue building on its "drop" product release strategy. It will also forge ahead with merch and apparel.
"The next phase is to continue our incredible trajectory," said McGrath exclusively to Fashionista. "We have been so blessed to have such an engaged and passionate customer base and the aim is to continue to provide them with more groundbreaking, straight-from-the-runway products and a makeup experience that they cannot get anywhere else. I get so much joy and satisfaction when I see how much our loyal customers love the products, it fuels us to come up with even more innovative creative ideas."