Why Distressed Acquisitions Are Ramping Up in Beauty

In 2025, beauty M&A was a tale of two extremes.

There were the buzzy, hefty transactions of red-hot assets like Hailey Bieber’s Rhode (acquired by E.l.f. Beauty for $1 billion), Medik8 (acquired by L’Oréal for $1.1 billion) and Touchland (acquired by Church & Dwight for up to $880 million), and on the opposite end of the spectrum, sales of once-buzzy but underperforming brands like Kate Somerville and Nudestix — with little action in the middle of the market.

Distressed sales like the latter are only likely to ramp up as major conglomerates look to optimize their portfolios while beauty grows ever-more competitive, and indie founders seek increased support for the same reason, experts say.

“There’s a lot of indigestion taking place among the larger strategics, some of whom just added too many brands to their portfolios in the five to 10 years leading up to 2021, when the frenzy of M&A activity across channels peaked,” said Andrew Charbin, managing director of consumer investment banking at PricewaterhouseCoopers.

Indeed, in recent months, it has been speculated that the Estée Lauder Cos. could be looking to offload brands including Too Faced, Smashbox and Dr.Jart+, and LVMH Moët Hennessy Louis Vuitton is exploring sale options for Rihanna’s Fenty Beauty, according to reports. In addition, in December, Pat McGrath Labs’ assets were marketed for sale after years of speculation over the future of the brand, once valued at $1 billion.

The realm of potential buyers for these brands is growing fast as players from private equity firms to operators and beyond look to grow their respective stakes in beauty, and in some cases, prep brands for future exits.

“There are buyers who are looking at some of these underperforming brands saying, ‘there’s still life in these’ — as long as the business has a good enough gross margin, they can figure out how to make cash,” said Ilya Seglin, managing director, consumer, retail and e-commerce at Cascadia Capital.

Here, five key firms to know within beauty’s growing universe of distressed acquirers.

1. AS Beauty

Founded: 2019

Brands: Laura Geller Beauty, Bliss, Julep, Mally Beauty, CoverFX

Launched by E.l.f. Beauty founders Joey and Alan Shamah alongside Victor and Ralph Azrak, AS Beauty is a $500 million-plus New York-based business that specializes in reinvigorating brands on the downturn.

“Whether that’s a divestiture, or it’s a brand that has had stalled growth or was invested in by private equity, we feel that we can scale and grow businesses, both digitally and at retail, in a successful way because we’re focused on operational excellence,” said Joey Shamah.

Laura Geller Beauty is the biggest brand within the AS Beauty portfolio, followed by skin care brand Bliss, which the company acquired in 2023, and then Julep, Mally and CoverFX, which are significantly smaller and “may be sunsetted over the next year,” Shamah said.

AS Beauty has grown Laura Geller and Bliss by leaning into Gen X and Baby Boomer customers versus trying to age the brands’ respective shoppers down. It has also accelerated the brands’ online distribution via Amazon and, in the case of Laura Geller, launched on Ulta.com and Sephora.com this year.

In 2025, the company saw 30 percent growth, coming off 100 percent growth the year prior, with online channels comprising most of its sales. International growth is also key for AS Beauty, said Shamah, adding that the company has grown the U.K. — its number-two market — to 15 percent of the business.

In terms of potential future acquisitions, AS Beauty is open to brands that are doing upward of $50 million in revenue and that “have had a reason for being over the last 20 years — something we could bring back to its roots and grow,” Shamah said.

2. Windsong Global

Founded: 2006

Brands: JVN Hair, Pipette, KVD Beauty

Established in 2006 by William Sweedler, Windsong Global is a consumer-focused investment firm made up of “hands-on operators — not passive investors,” said Sweedler, who also cofounded Tengram Capital Partners in 2011. “We love to enter a business through dislocation, carve-outs, special situations — those are our core competencies, and we specialize in situations where operational turnaround drives the return, not financial engineering.”

When biotech firm Amyris’ beauty arm went bankrupt in 2023, Windsong Global snapped up Amyris-incubated JVN Hair, founded by hairstylist Jonathan Van Ness, and Pipette, a skin care brand designed for kids and babies, in an auction for a combined $3 million. This September, Windsong also acquired makeup brand KVD Beauty from LVMH-owned incubator Kendo Beauty.

“At the time of acquisition, the combined JVN and Pipette businesses had a loss that was north of $40 million,” said Sweedler, adding that within one year under Windsong, the brands made a small profit, which doubled in size in year two.

“Running a consumer portfolio is very different than running a biotech firm,” said Teresa Lo, formerly president of JVN and Pipette at Amyris, and now president of Windsong’s Belle Brands family of beauty brands. “Now, we have more control over a lot of the supply chain, warehousing, cost of shipping goods. In some cases, it’s as simple as negotiating better terms with vendors that you work with.”

The company believes that makeup brand KVD Beauty, currently an eight-figure business, can be rebuilt back to its former size of more than $100 million in revenue, especially as expressive makeup trends begin to make a comeback.

In terms of future investments, “we’re looking to stay on the cutting edge of what’s considered the cleanest and the best, and we’re looking at businesses that range from unprofitable to break-even to profitable,” Sweedler said.

3. Auréa Group

Founded: 2021

Brands: The Body Shop, Dcypher

Founded in 2021 by Mike Jatania and Paul Raphaël, Auréa Group invests in myriad beauty companies but is perhaps best known for leading The Body Shop out of its long-winded bankruptcy troubles.

Auréa acquired The Body Shop in 2024 from Aurelius (which had purchased the once-revolutionary beauty brand just one year prior from Natura & Co.), and returned it to profitability within three months under new ownership, and less than nine months since Aurelius put the brand into administration that March.

What largely enabled this swift recovery was addressing bloated IT costs and reducing the U.K.-based company’s number of headquarters’ down from two to one. “Those were some of the low-hanging fruits in terms of the cost base,” said Raphaël, adding that bringing The Body Shop to Amazon this year and looking to steadily reinvigorate its product suite have also been important changes.

Brick-and-mortar sales comprise the bulk of the brand’s sales, though Auréa looks to boost The Body Shop’s online sales to between 30 and 50 percent of the business, Raphaël said. The Body Shop has more than 1,500 stores globally, with about 200 being owned stores and the rest, franchises. The U.K., India and Australia are its top three markets.

Auréa also has investments in Herbivore Botanicals, Dcypher, Scandinavian Biolabs, Persimmon Life and Nutraceutical Research Innovations. The group led a 2024 series B funding round for Herbivore Botanicals, which is similarly a 2010s-era skin care brand looking to make a comeback, most recently launching at Ulta and launching a 15-piece body care collection in December.

“We’ve made two investments a year and that’s probably the pace we’ll remain on for the next few years. We’re going to continue to focus on beauty, wellness and particularly, longevity,” said Raphaël.

4. Rare Beauty Brands

Founded: 2011

Brands: Patchology, Kate Somerville, Dr. Dana

When Kate Somerville went up for sale earlier this year, Rare Beauty Brands answered the call, acquiring the aesthetician-founded business from Unilever.

“We had been looking for more brands to add to the portfolio, and were thrilled when Kate Somerville went for sale. I’ve always loved the clinic-born concept and strong positioning of the brand,” said Chris Hobson, founder and chief executive officer of RBB, whose portfolio also includes skin care brand Patchology (which Hobson founded) and nail brand Dr. Dana.

The executive is looking to bring the Kate Somerville brand back to a strong position by leaning into its clinical roots and exalting its hero ExfoliKate line of cleansers and treatments, priced between $46 for a foaming wash and $85 for an exfoliating treatment.

“Big strategics are very good at managing $100 million-plus brands, and when you get into a smaller brand, it’s less about process and more about creative flair; less about scale and more about agility — we think we can bring that piece back to the brand,” said Hobson, adding, “we will continue to sell to that core Kate Somerville consumer, who’s the affluent, highly engaged skin care consumer.”

Industry sources estimate that RBB’s gross revenue exceeds $50 million, with Patchology’s business being slightly larger than that of Kate Somerville, followed by Dr. Dana. As for additional acquisitions, “they’re not number one on the priority list because we’re in the thick of making sure we integrate the Kate Somerville team and products with excellence,” said Hobson, adding that the he anticipates company “will be acquisitive in the years ahead.”

5. American Exchange Group

Founded: 2008

Brands: Indie Lee, Urban Skin Rx, AX Beauty Brands (formerly HatchBeauty)

Accessories and apparel company American Exchange Group first planted its flag in beauty in 2023, acquiring the group of brands formerly known as HatchCollective, which includes NatureWell, Txtur, Orlando Pita Play, Lique and Paint & Petals for an undisclosed sum.

The group of brands was rebranded to AX Beauty, and AEG has since acquired two more beauty companies: clean skin care brand Indie Lee, and aesthetician-founded Urban Skin Rx, in 2024 and 2025, respectively. AEG’s fashion portfolio includes Aerosoles, Ed Hardy and Alexis Bendel.

Its beauty arm, which focuses on the masstige market, is said to have done $80 million in net sales in 2024. Most recently, AEG acquired women’s fashion brand, Venus, in August.